Prioritizing benefit plan sustainability

Exclusive roundtable explores possible solutions such as health-care innovation, personalized medicine, fraud intervention

Prioritizing benefit plan sustainability
From left: Sun Life participants Joseph Peter, vice-president of fraud risk management; Marie-Chantal Côté, vice-president of market development, group benefits; and Rommel Fifi, director of business development.

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In September, Canadian HR Reporter hosted an exclusive roundtable sponsored by Sun Life that explored the issue of benefits plan sustainability, including: What is driving the increases? What are some tools and approaches that can help combat the rising costs? How can all stakeholders play a part?

Employer-provided medical benefit costs in Canada have been rising dramatically each year, for years. As a result, many employers have been inclined to remove products or services from benefits plans as a way to cut costs, according to Rommel Fifi, director of business development at Sun Life in Toronto.

But employees value their benefits more so than before, he says, citing a recent survey that found 67 per cent of Canadian employees would rather keep their benefits plan than receive an extra $5,000 in salary.

It is something people are paying more attention to and really making sure that their employer offers benefits, says Fifi.

“Since employees have placed such a high value on the benefit plan, the employers aren’t able to [make cuts] anymore. So, we have to find creative ways as to what we can do to keep these plans sustainable."

Rising costs a challenge

There are quite a few factors driving up benefit costs, with one big one being the aging workforce, says Fifi.

“In 2021, there’ll be a 30 per cent increase in the number of people over age 55 in the workforce... but it puts a strain on the benefits plan.”

As people grow older, there’s a higher prevalence of chronic disease. For example, there are 50 per cent more people with Type 2 diabetes today than there have been in the last 10 years, he says.

“That puts a strain on the benefit plan because... you are going to be needing more medication and you’re going to be needing more therapy.”

There’s also a greater prevalence of high-cost medications, says Fifi.

“We estimate that this specialty medication is going to represent over 40 per cent of benefit plans in the next few years. So, that’s a quite a large portion of the benefits spend that is going to drugs that could be upwards of hundreds of thousands and sometimes millions of dollars.”

The situation we’re facing to-day is only going to get tougher, because the costs of an aging workforce, chronic disease and drug expenses are not going away in the foreseeable future, says Marie-Chantal Côté, vice-president, market development, group benefits at Sun Life.

“When we talk about the aging workforce — well, that’s probably not going to change for the foreseeable future. When we talk about chronic disease, that’s also not going to change,” she says.

“And the cost of drugs? We know that we have an entire new category of drugs entering the market on gene therapy that’s going to also make that even tougher,” says Côté. “It’s time to think about this now to course-correct the [benefits cost] curve for today and for tomorrow.”

And that correction involves all stakeholders, she says.

“Benefit plans are meant to help employees live healthier lives... be productive, and live fuller lives. So, it’s important that they play a key role in maintaining that plan for themselves. The second piece is employers looking at their plans in a modern fashion, looking at some of the different forces, different factors, etcetera, and making sure that their plan is aligned with that and encouraging the use of these tools.”

The third piece involves private payers such as Sun Life, which have the skills of negotiation, and providers, who can provide tools and information to employees, says Côté.

“Together, with the government, with different forces, we will be able to bend that curve.”

Focusing on sustainability

A 2019 study done by the Conference Board of Canada found that both the short- and long-term priorities for employers when it came to benefits plan is sustainability, she says.

“[It’s about] providing solutions, options, ways of looking at the plan to eliminate some of the inefficiencies, and looking for ways to generate the most value from the plan.”

One of those solutions involves leveraging healthcare innovation, says Côté, citing one of the recommendations in Sun Life’s Bending the Benefits Cost Curve white paper.

This involves enabling technology to deliver health-care services in better and more cost-effective ways. For example, online cognitive behavioural therapy (CBT) can be a very successful tool in providing much-needed access to plan members.

“There’s different barriers to accessing this therapy and some of it could be cost, some of it can be geographical location, some of it can be stigma around talking about anxiety, depression,” she says.

“Helping employees live healthier lives early in the diagnostic cycle, to me, is a great way to bend the benefits cost curve. So, through providing more access, quicker — [and] leveraging digital technology to do that — is one component.”

Personalized medicine such as pharmacogenomics — leveraging genetic testing so patients respond better to medical drugs — is another component, says Côté.

“The principal is trying to help employees feel better sooner,” she says.

“Research has shown that it often takes multiple times before a patient finds the best drug for their condition only because one of the key factors for determining how you will react to it is your genetics. So, two of us can have the same condition, but one of us will react differently to the drug.”

Employees who are on disability can take the test to determine which drug would work best for them, says Côté.

“What this does is it significantly accelerates your ability to be back on your feet, return to work and live a healthier life.”

Insurance companies such as Sun Life can also leverage their scale to negotiate better prices with pharmaceutical manufacturers, and negotiate discounts on health-care products and services so that plan members have great products at a lower price — and at a lower cost to the plan.

“We vet and review those types of services so that our plan members can then feel comfortable that these are very solid, rich offerings that will help provide good outcomes... at very good prices,” she says.

Another solution towards plan sustainability involves health consumerism, according to Bending the Benefits Cost Curve. This is about empowering plan members with information and tools that help identify the products and services that are best for them, based on quality and value.

“There is an opportunity to help provide more information to plan members, to help them reduce their out-of-pocket or their copay, help sponsors with the plan sustainability and help the full ecosystem,” says Côté. “There’s an opportunity to help employees, plan members be-come better health consumers with more access to information so they can get the most value from their plan.”

Historically, this has been a place where employees don’t really understand the costs that are associated with the services they’re getting, says Fifi, “whether it’s massage therapy or physiotherapy or whether they’re buying a brace or a compression stocking.”

Often, people go to make a purchase but they don’t do any research with respect to price, he says.

“That’s what’s happening — employees are going out there and they’re purchasing items and they know they’re covered under the benefits plan, so they don’t bother checking or doing any research with respect to price. And the industry itself has taken advantage of that.”

Mitigating fraud risk

Another big area of focus when it comes to plan sustainability is fraud risk management, according to Bending the Benefits Cost Curve. This is about using the power of technology and fraud professionals to detect suspicious activity and delist suspect health-care providers.

Benefits fraud costs insurance carriers hundreds of millions of dollars annually, according to Joseph Peter, vice-president of fraud risk management at Sun Life.

“It’s a symptom of the reimbursement nature of a benefit plan where there’s a lot of trust built into the system,” he says. “To counteract that issue, it’s really important that insurers are able to both invest in the analytics required to identify these patterns and issues but also have the multi-disciplinary teams required to investigate.”

Delisting fraudulent providers is also a focus, says Peter, citing the 1,800 organizations removed from Sun Life’s reimbursement list since the program’s inception.

“That’s really proven to our management and to the employers that we service that this is a serious issue and that zero tolerance is the only way to deal with it,” he says.

While employers can often be sidetracked by concerns of individual employees submitting false claims, it is the larger networks of fraud that do the most damage, says Peter.

“Fraudsters out there — third parties outside of the system — are taking advantage of that [trust] to coach employees on ways to get around the system, get around the controls, submit false claims, and then the parties are working together to share the proceeds.”

Too often, employers make it more complicated than it needs to be by failing to properly prepare internal human resources policy, says Peter.

“They need to have the action plan in place... so everybody’s on the same page because, ultimately, the impact to that benefit plan and that employer will translate into reduced benefits and less opportunity to help the people that really need the help because of an actual medical condition.”

Employers have a major role to play in supporting investigators looking into collusion schemes, says Peter.

“One of the easiest ways and most important ways to do that is to really be clear with your employees around what are the standards,” he says.

“So, be clear that you do not accept fraud on the benefit plan. Treat it the same way as you would if they are walking out with boxes of supplies out of the back of the warehouse.”

Employees have a role to play in keeping benefits costs down, says Côté.

“When an employee steals from an employer, they’re really stealing from themselves in the long run,” she says. “Because then the employer will see costs rising.”

It’s really important to have everybody working together to continually combat this issue, says Peter.

“It’s not good enough just for an employer to worry about it or for the insurer to identify the issue or for the employees to try to be aware of the situation — everybody has to work together to identify it, to just stop it.”

For video highlights of the roundtable, please check out these 3 videos:

Bending the benefits cost curve by fighting fraud
Plan  members  highly  value  their  benefits.  And,  plan  sponsors want to offer competitive plans to attract talent and keep their employees healthy. But the threat to plan sustainability caused by health benefits fraud continues to rise for a number of reasons. Those reasons include: rising health-care costs, organized crime and limited law enforcement resources.

Educating plan members is a key component in helping to prevent benefits fraud. And the benefits industry needs to look at other members involved in the fraud landscape — along with the source of new, complex schemes.

The Canadian Life and Health Insurance Association (CLHIA) reported that health-care and other providers commit more than 80 per cent of suspected benefits fraud. They either do so on their own or with plan members. So, providers must be a key focus for insurance carriers.

Using an intelligence-led approach and rich data collection, Sun Life tracks where plan sponsors’ benefits dollars are going. This enables them to spot abnormal claiming patterns across medical and dental benefits. It also helps them to see when suspect fraudsters are targeting plans for collusion schemes.

By exposing new schemes and detecting when fraudsters target benefits plans, the Sun Life Fraud Risk Management team can often prevent it from happening. Their team also help plan sponsors put policies and procedures in practice, to reduce the risk of benefits fraud.

Before processing claims for a new provider or association, Sun Life verifies their credentials. And they act fast to stop accepting requests from suspicious providers — a process called delisting.

If their team suspects fraud, they help their clients deal with the issue throughout the investigation and recovery process. They also help them reestablish trust within their businesses, after dealing with a fraud case.

Sun Life’s goal is to stop benefits fraud with a proactive approach to fighting fraud and plan abuse. They are working to bend the benefits cost curve and support plan sustainability.

To learn more about Bending the Benefits Cost Curve and other innovations at Sun Life, visit


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