Takeaways from Benefits Canada’s: Face to Face Drug Plan Management Forum
Emerging high-cost drug treatments have been posing a risk to benefit plans at an exponential rate over the last several years. Just one high-cost drug can deteriorate a plan sponsor’s claims experience in the blink of an eye, especially for smaller employers with traditionally low claims, or those with Administrative Service Only (ASO) funding arrangements who are assuming most of the risk. Not only is this a risk to plan sponsors financially, but it also inhibits the ability to make a carrier change, or in some cases, make certain plan design changes.
Measures that once created an “out of sight, out of mind” mentality, such as stop loss thresholds, are no longer providing the same level of security. Many plan sponsors are not prepared for the increases that insurance carriers are applying to their stop loss charges across their block of business to account for these unpredictable claims. For ASO clients, the risks are even higher, and fees could be detrimental if claims reach substandard risk levels.
Why is this important?
Due to these risks, drug plan management is becoming an increasingly popular topic. Not only concerning how to effectively manage the risk of high-cost claims, but also ensuring your plan is designed in a way that improves health outcomes for all.
We had the opportunity to attend the Benefits Canada Virtual Drug Plan Forum and would like to share our key takeaways.
1. Prior authorization (PA) processes need to be simpler & quicker to be effective.
Prior Authorization is an integral part of the drug plan management toolkit. It is a tool that manages individual plan member decisions and provides a process for review of patient information prior to drug submission. The current PA process involves many hand-offs, and as such, it is not typically top of mind for plan sponsors when considering cost containment strategies. Digitizing the PA process (known as ePA) will add simplicity, increased time savings, and allow for richer analytics to be used by carriers. Additionally, it will allow for more drugs to fall under PA leading to greater potential for cost savings down the road.
2. Drug plans can lack inclusion without plan sponsors knowing it.
(i) Anti-Obesity, or ‘Lifestyle Drugs’
There is more to obesity than measures of size (BMI) and there is more to supporting employees with this disease than only offering a wellness program. According to Dr. Sean Morton, medical director of the Wharton Medical Clinic, society tends to be biased towards obesity and believes in an ‘eat less, exercise more’ mentality. Treatment needs to move away from this mentality to a focus on overall health while determining the root cause of the disease. Evidently, some of the exclusions that exist in employee benefit plans require employees to jump through unnecessary hoops to fulfill their weight-loss treatment plans, such as weight-loss drugs. One of the pillars of weight-loss management is pharmacological therapy. When excluding these from the drug plan offering, you may be sending the message to your employees that you do not support their weight-loss management journey.
(i) Diabetes – Flash Glucose Monitors
In 2021, Canada will celebrate the 100th anniversary of the discovery of insulin—a discovery that has changed the lives of many around the world. According to the 2020 TELUS Health Drug Trends report, drugs for diabetes ranked second in the therapeutic drug category for the second year in a row due to a combination of both volume of claims and price. Dr. Bruce Perkins, professor of medicine at the Division of Endocrinology and Metabolism, and the Institute of Health Policy, Management and Evaluation at the University of Toronto, discussed the importance of flash glucose monitors and their impact on supporting plan members who are living with diabetes. While helpful for both Type I and Type II diabetics, this technology is especially significant for positive health outcomes in Type I diabetics due to the complexity of the disease. In conclusion, these monitors can lead to lower benefit plan costs because of their impact on adherence and reduced hypoglycemia.
3. Lack of access to proper drug treatment options can lead to a spillover effect in other areas, leading to deteriorated health outcomes through increased disability incidence rates, increased absenteeism, and decreased productivity.
(i) Pharmacoeconomics & HRA
Pharmacoeconomic testing is the science of quantifying the value of a particular drug by looking at how it improves health outcomes as a measure of value. Specialty drugs occupy 42% of total drug spend in 2020 – up from 30% in 2015 and 17.5% in 2010. Public and private payers have different objectives. As they cover different populations, they have different needs. Currently, the majority of cost analyses is formed from the public payer perspective. Research suggests that taking a tailored approach could lead to more objective coverage decisions and thus improved health outcomes.
(ii) Pharmacogenomics and Mental Health Drugs
Pharmacogenomics, also known as pharmacogenetic testing, uses an individual’s DNA to assess how they will respond to certain medications and indicates which drugs may be most compatible. Drug treatments for mental health conditions are not straightforward, with many physicians having to use a ‘trial and error’ approach to find the most effective medication. Mental health related conditions have also been on the rise since the start of the pandemic, with 17% of claimants taking antidepressants. Introducing pharmacogenetic testing as part of managing these conditions can significantly improve patient health outcomes by allowing clinicians to provide personalized treatment. This can improve overall benefit costs through less experimentation, improved drug adherence, decreased visits to health care professionals, lower disability incidence rates and eliminate delays in getting employees back to work. Carriers understand this potential impact, and as such, ten Canadian insurers now offer at least one coverage option for pharmacogenomics under their disability or extended health benefits.
The point?
While it is important to manage costs and mitigate risk to your plan as much as possible, doing so is only effective if it is not causing spillover into other areas such as restricting access to treatment. Finding that balance is key. There are many ways that exist and are continuously evolving to ensure your benefits plan is inclusive for all, while managing costs simultaneously.
We would love to discuss drug plan management with you more and are always here to help. Let us review your drug plan to assess whether you are best supporting employees while effectively managing costs.
Meghan MacPherson
Senior Underwriter