Runaway drug costs

It may be a bit controversial, but companies should consider coinsurance as a possible remedy for the ever-increasing costs of benefit plans.
By Joy Sloane and Jacqueline Taggart
|Canadian HR Reporter|Last Updated: 09/06/2001

Striking a balance between attracting the best people, while controlling the costs of compensation remains a huge challenge.

After all, payroll and benefits are one of the biggest costs for an organization. It’s a pressure-cooker environment that HR professionals live with daily and any strategy to help manage these escalating costs without harming recruiting capabilities is invaluable. One such technique is coinsurance.

According to the Canadian Institute of Heath Information, drugs represented only 8.8 per cent of overall health-care costs in 1975. By 1985, this had increased to 9.5 per cent; in 1995, it was up to 13.4 per cent; and by 2000, it had climbed still higher to 15.5 per cent of overall costs.