Introduction: Derek Weir, Manager, Health Benefit Solutions at Medavie Blue Cross, offers an in-depth look at the latest trends, digging deep into our data to turn the numbers into valuable insights you can use to inform your benefit decisions. In this blog, Derek shares the key findings of his research and analysis, and then breaks it down in more detail.
Top 3 Trends: Making Sense of the Data
Speciality drugs (defined as those costing $10,000 annually or higher) continue to grow in size relative to overall drug spending, accounting for 31% of the per capita drug cost in 2018.
Claims continue to rise for treatment ofmental health disorders and chronic diseases, with mental health practitioners now the fastest growing Top 10 EHC benefit.
The use of paramedical practitioner benefitscontinues to surge, particularly massage therapy, with 15% of covered employees*now claiming for this benefit at an annual cost of over $100 per covered employee.
Top 3 Takeaways: Applying the Data
1. Take a fresh look at your benefits plans: Advisors can play a role in providing insights to employers to ensure their plan spends are optimal.
2. Ask if your plan spend is optimized relative to your plan objectives: Is the money you are spending accomplishing your plan objectives or are you leaving money on the table?
3. Ask if there are potential savings that can be reinvested in benefits that align with your plan objectives: Are there ways to save money and put it towards benefits that employees want and need, e.g. increasing your psychology benefit? Are there plan changes that can be made on the drug side to contain costs while still ensuring employees have access to the right treatments for them?
Rundown of the Results: Learning from the Data
Total Health Spending
“Although EHC represents only one-third of total health spending, high utilization of some EHC benefits, especially massage, has catapulted them into major drivers of health spending.”
Canada’s total health care expenditure (totalling $253.5 billion in 2018) as a percentage of GDP (11.3%) and on a per capita basis ($6,839) continues to rise. This is reflective of various utilization and cost drivers (demographics, population health, accessibility, consumer expectations, medical advances, technology, inflation and fraud).
EHC is taking a larger share of the total health spending pie year over year. In 2018, drugs accounted for 65% of total health spending, while EHC benefits made up the remainder.
Biologics for autoimmune diseases is the leading health benefit spend (11.7%), followed by diabetes (7.3%) and mental health (6.6%).
“Two-thirds of new drugs being introduced are now specialty drugs and the pipeline is full of them. It’s now common to see biologic or cancer drugs well into the $20-40K range per year.”
Per capita, drug spending in 2018 amounted to $378 and $833 for speciality and traditional drugs, respectively, for a total drug claim cost of just over $1,200 per covered employee.
Specialty drugs are driving overall growth, with a 7.3% trend, fuelled by an increased use of specialty drugs by more people – especially cancer and targeted biologic therapies.
“It is extremely important to not lose sight of the fact that the number of (mental health) claimants is up significantly – 6% trend on utilization in 2018 alone.”
Mental illness increasing significantly as a percentage of total disability claims over the past three years, particularly among younger workers.
Mental disorders is the number one cause of disability claims until the age of 55.
Psychologists are the fastest growing EHC benefit in the top 10, with significant increases in utilization and cost. This is reflective of employers offering higher maximums and more provider options.
Antidepressants is the #6 therapeutic category in terms of drug spending, in spite of the deflationary impact of generic pricing.
Usage peaks at age 54, with 20.2% of plan members claiming for antidepressants or 1 in 5 employees that age. The ratio is 1 in 10 for plan members at age 19.
Overall, 13% of the entire population of covered employees has claimed for antidepressants alone in 2018 or 1 in 8. 8.6 % also claim for counselling.
“Managing diabetes, a leading chronic disease, is not easy and the cost for claimants living with diabetes is almost three times higher than a non-diabetic claimant.”
The annual cost of a claimant living with diabetes (drugs and/or EHC) is $2,650 per year – three times higher than the cost per claimant without diabetes at $907. By 12 months, only 72% of claimants with diabetes were drug adherent (taking their medications properly 85% of the time).
We are also seeing a big jump in diabetic supplies, stemming primarily from inflation and the emergence of new blood glucose monitoring systems, which make diabetes management easier, at a higher cost.
“It is important to monitor this (paramedical practitioners) spending given that it is now a major driver of plan spending. In fact, massage therapy, physiotherapy and chiropractor now exceed the combined spending on high cost biologics for autoimmune disease that receive so much attention (drugs like Remicade, Enbrel and Humira).”
Paramedical Practitioners continue to dominate EHC spending, occupying half of the Top 10 EHC benefits and 4 of the Top 5.
Massage therapy is the leading benefit - and has been for some time - but is now separating itself from the pack. The cost of covering massage is now $105 per employee annually.
How Medavie Blue Cross can help: Taking Action on the Data
Mental Health Supports – We have a number of solutions to help plan members get the help they need, including our Employee Family Assistance Program (inConfidence) and early intervention to psychiatric care for short-term disability claimants. The latter has resulted in a 28% improvement in claimants returning to work before their STD benefit period ends.
iCBT, Pharmacogenetic Testing – We are now piloting internet-enabled Cognitive Behavioural Therapy (iCBT) on mental health disability claims and will add iCBT as an eligible expense under the Psychologist Benefit later this year. In addition, we recently launched a pharmacogenetic testing pilot to help plan members on disability claims determine the medications that will work best for them, based on their genetic profile.
Managing Chronic Disease Benefit – This benefit (a first for Canada) reimburses for health coaching from a registered health professional, with special training in disease management education, to help plan members better understand and control their condition. Supports are provided for the treatment of asthma, diabetes and cardiac conditions, as well as smoking cessation.
Medication Adherence – We are enhancing our mobile app to include a medication adherence tool that will enable plan members to set reminders to take their medications as prescribed.
*Derek’s data analytics are based on a sample size of approximately one million covered employees and $1 billion in claims, independent of plan design and funding arrangement. Covered employees means the primary cardholder and their dependents.