benefits
Benefit plans are a zero-sum game: there are a finite num-ber
of resources to go around. As drug spending in
Canada increases, the sustainability of drug plans is at
risk. In 2017, total drug spending is forecast to be $39.9
billion, an increase of 5.5 per cent over the previous year, which is
the second-largest share of health expenditure in Canada. Of this
figure, $12.1 billion will be paid for by private health insurance.
Like any industry of scale, the interplay between stakeholders
is extremely complex. However, unlike other industries,
there is more at stake because drug benefit plans
provide employees and their families with
medications that can have a profound
impact on their wellbeing.
In the private sector, prescrip-tion
drugs are financed by private
health insurance, which busi-nesses
buy into on behalf of
their employees. For about a
half-century, most Canadian
employers have had open drug
plans – meaning that plans cover
every drug at any price. However,
over the past decade there has been
a significant and potentially unsus-tainable
increase in drug spending,
resulting in higher drug costs and in-creased
use. As a result, many private drug
plans are reaching a tipping point and need to em-brace
change or risk having to use blunt measures to manage costs.
The solution is to strike a balance through drug plans that provide
the best healthcare value for employees and employers.
Lightspring / Shutterstock.com
Putting
the Benefit
Back into
Drug Plans
WHY EMPLOYERS NEED TO
EMBRACE CHANGE AS DRUG
SPENDING INCREASES
By Helen Stevenson
HRPROFESSIONALNOW.CA ❚ FEBRUARY 2018 ❚ 27
/HRPROFESSIONALNOW.CA
