Making connections to improve health benefit plans

Disconnects can cause problems for employers, employees

Many employers are ill-equipped to develop a strategic approach to health and managing health benefit plans. This is a particular challenge for the many Canadian businesses with fewer than 100 employees.

While an aging workforce means chronic conditions will only escalate, many plan sponsors are not making the connections needed to respond appropriately, according to the 2014 Sanofi Canada Healthcare Survey. Employers will need to move beyond cost control and passive approaches to health promotion.

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The first connection is with employees: A resounding 90 per cent of plan sponsors believe their workplaces encourage health and wellness among employees. But only 60 per cent of employees agreed, indicating a big perception gap.

While health benefits are important to all plan members — with four in five (78 per cent) reporting these are an important factor when choosing a job — only 52 per cent of plan sponsors say keeping employees healthy and productive is a main purpose of offering their health benefit plan.

"It is important that health-care plan sponsors and plan providers design health-care benefit plans that respond to the needs of their employee populations," says David Willows, vice-president of strategic market solutions at Green Shield Canada.

"The goal of the plan should be to keep employees well, so that those involved (sponsor, provider and employee) do not find themselves with greater health costs and lost productivity."

And while almost one-half (48 per cent) of plan members expect their health benefits will continue after they retire, only one-quarter (23 per cent) of the employer respondents provide post-retirement benefits — and only one-half of those (12 per cent) offer the same benefits plan as for active employees. The survey sampled 1,502 plan members and 500 employers.

Large numbers of retiring employees are going to be surprised and disappointed, and will perhaps look to government to top up provincial health plans to provide the benefits no longer provided by their former employer. This is a connection governments will want to avoid, but one plan sponsors and members should be concerned about in provinces where public drug plan eligibility doesn’t begin until age 65. Retirement decisions may be deferred when early retirees know they will have no drug coverage.

Identifying, acting on costs

For decades, the dominant issue in plan management has been cost control. Fortunately, with data, we now can identify the drivers and mitigators of costs. Making new connections between datasets can also help assess differences within workforces — whether generational, income-based, occupational or positional.

This collection of health-related organizational costs — including benefit plans, presenteeism, workers’ compensation and occupational health and safety — allows us to see a much larger denominator than the two per cent of payroll typically devoted to the drug plan. In turn, that allows us to link and reduce the human, financial and operational impacts of illness and injury.

However, only one-third (36 per cent) of employers say they regularly receive an analysis of claims data from their insurer or advisor, with a further 20 per cent receiving this type of information occasionally. And of those who do receive this type of data, just 49 per cent use it to develop targeted improvements to their plans.

"The health care of Canadians in general would benefit from further partnership, information-sharing and data analysis," says Jon Fairest, president and CEO of Sanofi Canada. "By setting goals to optimize health and productivity, plan sponsors will reap the returns of reduced absenteeism, improved productivity and an engaged workforce."

Absenteeism is a good place to start. About six in 10 plan members have to fill in forms to report any absence (22 per cent) or absences exceeding two days (40 per cent). Twenty-eight per cent have to contact their manager.

Yet just 17 per cent of employers worked with their insurer or benefits advisor to formally analyze the drivers of absence and disability, according to the Sanofi survey. And 70 per cent indicate they didn’t know what their absenteeism rate was for last year.

The Conference Board of Canada estimated the cost of absence at about 2.4 per cent of payroll in 2012 — a cost too big to overlook. There’s a missed opportunity here for insurers and advisors to create higher value services for their clients, ones that address both personal and organizational causes.

"Whether you think that health benefit plans are a huge cost or a small cost, why would you have any cost that you don’t understand?" says Paula Allen, Sanofi Canada Healthcare Survey advisory board member and vice-president, research and integrative solutions at Morneau Shepell.

Employers, governments support health

Another increasingly urgent connection is between the two main payers — provincial governments and employers. This may be the trickiest connection to establish but it has already started in selective ways. Both Quebec and New Brunswick have established deliberate public-private strategies to ensure all residents have drug coverage.

Those connections should extend beyond drug policy. Governments, public health and business all have interests in promoting health. Employees are at the centre of such issues and their needs must be considered.

Plan sponsors may begin by asking their insurers and advisors to play a bigger role in guiding health promotion. Indeed, 93 per cent of employers in the survey sample say they expect support from their carrier for health promoting programs, and 74 per cent say "a lot of support" is needed.

Closer connections and greater trust might also reduce the tension between those who pay and those who benefit. High-cost biologics and cancer drugs have created some anxiety in recent years. Now, expensive new vaccines for hepatitis C are being introduced and the first such product will cost about $55,000 for the drug alone.

These situations introduce the need for a new type of connection — advocacy. In addition to engaging and directing insurers, employers will need to connect with each other to ensure their interests are considered by governments and the drug supply chain. While individual employers may not have the time or resources to promote these interests, perhaps local chambers of commerce are prepared to take a larger role.

Changes are faster and more complex, and single-party solutions will become increasingly inadequate, even counterproductive. While the dominant focus of health benefit plans for the last three decades has been cost control, there are important opportunities related to better connections. Employers need to cross-pollinate by moving information and communicating their changing expectations to insurers and advisors. We ought to move beyond a singular focus on health benefit costs to the richer connections between health drivers and organizational success.

Chris Bonnett is president of H3 Consulting in Guelph, Ont., and a member of the Sanofi Canada Healthcare Survey advisory board.

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