Product Modernization

The view from warp speed...

Brad Fedorchuk, VP, Group Marketing

Ah, the group benefits industry. Sometimes when the issues are piling up, when the questions are pouring in, exceptions need to be handled, and with today’s reality of constantly being busy, it feels like the world and our industry are moving at warp speed. 

Of course, the reality is things also move slowly enough that it’s hard to understand how we can’t keep up. Whether the pace for you right now is fast or slow, there are three major trends that need to be considered in plan design:

Generics

It seems like forever ago that the Competition Bureau published a report suggesting that generic drugs were over priced because the market wasn’t competitive. Provincial drug reforms have been going on ever since with reactions from all sides. Many generic drugs are now priced at between 18 and 35% of their brand name counterparts.  Brand name manufacturers have combated with ‘coupon cards’ that will pay the cost differential between the brand and generic version. A policy in the case of generic drugs has always been a good idea but today it’s not something a sponsor should ignore. Without a policy sponsors are incurring between 4 and 6% more on their drug spend. All provincial government programs use generics first. Opinion is split as to whether a generic policy is modern or not, it’s fair to say that a plan absent of a policy is living in an outdated environment.

Specialty Drugs

There’s no standard on these drugs, but they share some common characteristics:

• They’re often the last therapy option. Other treatments have failed, and these drugs often represent the last hope for a patient who is very sick.
• Often very, very expensive – $30K or more a year is common and costs can reach to upwards of $600K - and these are chronic conditions, meaning the expense is ongoing.
• Provincial coverage is partial at best. A longer discussion for another time, but this is an area where it seems some still believe someone else will cover it. 

Use of these drugs has increased over the past several years and is growing faster than other areas. With that in mind, no sponsor should be without a policy on these drugs. 

Many group plans don't include consideration
of health and wellness policies

Do you want your plan to provide the best coverage for minor ailments, or for protection from chronic disease that could financially ruin someone, or much worse, force someone to go untreated? 

Regarding employee health, there’s a decision to be made. Many employers have workplace health and safety policies but many recently-implemented group plans do not include consideration of health and wellness policies. 

More resources are available from insurers and other sources than ever before - the opportunities to review and modernize have never been better. 

In terms of plan you should consider:

• How a policy on generic drugs can positively impact a plan.
• Specialty drugs are expensive but insurable. Do you want the best coverage for cough syrups or for cancer treatments?
• If you could prevent just one employee’s diabetes from progressing further would you take action?

These questions reinforce the need to set clean policies and luckily, there are many resources available to help answer them.

Do you want to have claims managed without seeing if the treatment is working or being complied with? At $30K a year, that is a lot of expense to go unchecked. Patients have a responsibility to use their medications properly. These, and other questions, are central to developing a clear policy on high cost medication.

Seize the opportunity to achieve modern plan management

Health strategies

Many medications help people stay healthy. Some, but not all diseases are either preventable or manageable so a serious health condition is prevented. What about screening to detect pre-diabetes, hypertension, or high cholesterol? These aren’t easy processes to implement but can help with improving plan member health, rather than relying on medications only. What about follow-up? After medication is prescribed who’s ensuring the patient is taking them correctly? Does the patient need help, or maybe a different medication that’s easier to take?

These three trends present a lot to think about but solutions are available that are easy to incorporate. Seize the opportunities to achieve modern plan management.

Products with Purpose

By Brad Fedorchuk, VP, Group Marketing

We work in a big company, though it doesn’t always feel that way. Perhaps as a function of the often difficult to express “corporate culture,” we sometimes still see ourselves as a small prairie company. With a history that now spans over 125 years, it’s important to reflect on our sense of purpose. We provide coverage to more than nine million Canadians and 33,000 businesses, and it is crystal clear to me that my responsibilities extend beyond our company to the many Canadians who use our products.

How we tracked mortgages, once upon a time.

While our sense of purpose has evolved with the growth of our company, it hasn’t fundamentally changed. In the late 1800s, access to financial products to aid the new and growing western-based economy was difficult and for the most part, was sourced by companies based out of eastern Canada. In 1891, our company was formed with a clear objective – to provide farmers in western Canada mortgages at fair interest rates. Providing mortgages and financial support tools was the foundation of our business for many years.

Sometime between 1910 and 1920, a young, western Canadian farmer, Saskatchewan to be precise, found himself wanting to expand the family farm to meet the needs of his growing family. And, so it was, a mortgage was taken out with Great-West Life. Very appropriate since his needs were the very reason Great-West’s products were built.

That young farmer, as this story (perhaps predictably) goes, was my great-grandfather, James. I’m pretty sure James would be rather pleased that his great-grandson is now working for the company that saw and filled a need, and that our fundamental values haven’t changed.

Great-West was formed to help farmers in Western Canada.

Jumping forward about 100 years, we’re investing a lot of effort into health care. We’re researching and ensuring we manufacture products with clear purpose. Health care itself is highly inflationary, so I know we need to come up with product designs to help reduce costs. But, it’s health care, not cost care, so, with those same fundamentals, we’re filling a need by ensuring we pay the utmost attention to health needs. In short, we work to balance the health care needs of plan members with the affordability needs of plan sponsors. 

This approach means a few things to our products:

• We take a long term view. As a multi-product carrier, it’s something we need to do. We know that certain drugs help patients avoid a disability, for example. So balancing today’s costs with longer term health benefits makes financial sense, and it makes sense for the well being of our plan members.
• We go beyond paying a claim. If someone were at risk of drowning, you would throw him a life line? For sure, and you’d stick around until you were satisfied he was safe. If we see that plan members aren’t compliant with their health treatment, we increasingly challenge ourselves to identify those situations and offer support. Paying a claim is a necessary part of what we do, but it’s not always sufficient in helping plan members achieve better health.
• We do our best to avoid hard rules. We’re all different; we have different DNA, different habits and different capabilities when it comes to managing health. It’s easier to implement rigid rules than to recognize these differences. But, where we can, we try to offer exception processes and case management processes. In exchange, we ask plan members to try lowest cost services where they can. 

We seek to offer products that leave no Canadian behind

When we accomplish these things, I believe we’re succeeding in manufacturing our products responsibly, earning our administration fees and meeting our purpose. In short, we seek to offer products that leave no Canadian behind.

Will our products sell better or be more profitable with this approach? To be honest, I’m not sure, but I do know that no matter what our approach, not every customer will choose our products. I hope that those who do choose our products, will be aligned with our sense of purpose and fundamental values.

GroupNet Text is here!

Canadians send 274 million text messages every day.

When something’s this popular, you have to be part of it!

Great-West’s just-released GroupNet Text gives plan members access to their benefits plan details through text messaging.

GroupNet™ Text  provides plan information on mobile devices including:

• Plan number and member ID
• Coverage details*
• Co-insurance amount
• Benefit maximums, balances and more.

To sign up for GroupNet Text, plan members can log on to Great-West’s GroupNet for Plan Members and update their selection in the Your Profile tab. Click here to visit GroupNet now!

*Plan details available depend on plan design. Compatibility of GroupNet Text may vary by mobile device and/or operating system. Charges may be incurred depending on the user’s cell phone contract.

Drug Co-pay Cards & Coupons

Drug co-pay cards and coupons and their impact on benefit plan costs

We’re used to using coupons for anything from free movie admission to cereal. What’s not to like? They’re easy to use and you save some money. But since when have coupons for prescription drugs been popular? The fact of the matter is they’re quite common but drug coupons don’t work quite the same way as a other coupons.

Using drug coupons 

Typically, patients get drug co-pay cards or coupons, from their physicians but they’re also available from other sources including pharmacists and the drug manufacturer’s website.

Co-pay cards or coupons for the most part, are available for brand name drugs only. When the pharmacist bills for the medication, he/she uses the card like a pay-direct drug card to electronically direct part of the patient’s cost (coinsurance, deductible or co-pay) to the manufacturer of the drug. Sounds good so far, right?

The thing is, co-pay cards or coupons might actually cost the benefits plan:

• In an environment where generic equivalents can cost as little as 18% of the price of their brand name equivalent, a $30 coupon doesn’t go very far when the cost of the brand name drug is $100.
• Some co-pay cards and coupons are designed to be the payer of last resort. That means the drug manufacturer is the last payer after the drug plan has paid.

For example:

Jim’s doctor writes a prescription for Crestor with ‘no substitution’ indicated on it along with a $30 Crestor co-pay coupon to help pay for the cost of the medication.

Jim’s coinsurance is 20% and includes regular generic substitution.

Scenario 1:

Jim has coverage through his own group plan as well as his spouse's

Crestor cost $100

Plan cost $80

Spouse's plan $20

Amount paid by coupon $0

Scenario 2:

Jim has coverage under his plan only

Crestor cost $100

Plan cost $80

Amount paid by coupon $20

We have a fix!

Many drugs are available in both generic and brand name forms. Generic forms are typically less expensive but are just as effective as brand name forms. They’ve been approved by Health Canada as equivalent and have the same active chemical ingredient, same dosage strength and same dosage form.

A fail safe solution to avoid unnecessary drug claim costs is implementing Great-West’s Enhanced Generic Substitution into your plan. This plan design element ensures that reimbursement is limited to the cost of the generic version of the drug (even in situations where the prescribing physician has indicated ‘no substitution’ on the prescription). 

Here’s what happens when Great-West’s Enhanced Generic Substitution is implemented into a plan. 

Scenario 3:

Jim's plan includes Enhanced Generic Substitution (EGS)

Crestor cost $100

Plan cost $23 (cost of the generic version)

Amount paid by coupon $30

Shopping With Someone Else’s Money

Generally speaking, when you purchase a product, you research, compare, make the decision, and finally, pay for it. Of course, a big part of the process is shopping for the best price. 

Compare this to the process of getting a prescription drug. It’s kind of like shopping with someone else’s money.

Role                             Played by

The consumer              The patient

The decision maker      The doctor

The payer                     The employer’s group benefits plan

Essentially, the consumer is prescribed a drug by the decision maker. The consumer gets the prescription but all or most of the cost is absorbed by the employer’s group benefits plan. Consumers don’t have to shop for the best price – they might not even know that prices on prescription drugs vary, or they might feel that cost doesn’t matter because they’re only responsible for paying a small portion of the cost. As a result, the payer, (the employer) pays, but hasn’t had any say.  

Sometimes when doctors ask “do you have a drug plan?” it’s their way of asking “do you care how much this costs?” Let’s be fair. Doctors aren’t trained in the world of group insurance, or the impact of claims experience on premiums - this doesn’t fall under the umbrella of their responsibilities. But we’re working to make an impact where we can. When asked, one of our goals is to change the way patients answer this question. 

From the sponsor’s perspective, it’s complex. They want to provide a plan that’s both comprehensive and sustainable, but they’re struggling with the affordability. Plan sponsors fund drug plans, but have had little control over the actual payment process - until now. 

We’re prepared

We’ve developed DrugSolutions, a series of drug plan management options and solutions that focus on balancing the cost to the plan sponsor with the health care needs of their employees. Options and solutions include:

Enhanced Generic Substitution – Generic versions of brand name drugs can cost as little as 18 per cent of the brand name. With Enhanced Generic substitution implemented into a plan design, reimbursement of a drug claim is limited to the cost of the generic equivalent. 

Health Case Management – Taking specialty medications can be overwhelming. Unfamiliar terms, instructions and side effects, can be stressful. This program provides support to enhance the patient’s experience and help him or her understand and adhere to the treatment plan. 

Balance

We’re listening carefully to the concerns of plan sponsors and including their voice in the drug purchasing conversation. Implementing new plan design options can bring balance to contributing to better health outcomes and quality of life, while reducing the cost assumed by plan sponsors.

Barb Martinez, 

Practice Leader, Benefits Solutions

New Diabetes Guidelines Released

At your next visit to the doctor, you may find a new testing approach and new diagnostic criteria in place for diabetes and prediabetes.

Guidelines released earlier this month by the Canadian Diabetes Association include a recommendation for use of the A1C blood test. This test provides a single, practical measure of average blood glucose with no need for 12-hour fasting.

As well, diabetes will now be diagnosed at different blood glucose levels. Those with an A1C level of 6.5 per cent or greater will be diagnosed with diabetes, while those with an A1C level of 6.0-6.4 per cent will be diagnosed with prediabetes.

Screening for type 2 diabetes is recommended every 3 years for all Canadians over 40, or earlier and more frequently for those with risk factors. 

For Canadians already diagnosed with diabetes, the guidelines encourage knowledge of the heart health ABCDEs:

• A – A1C in optimal range
• B – Blood pressure optimally controlled
• C – Cholesterol in target range
• D – Drugs – heart-protecting medications for the right patients
• E – Exercise and other lifestyle measures
• S – Stop smoking 

New interactive tools for assessment and management of diabetes are available at http://guidelines.diabetes.ca, along with the full text of the new guidelines.

Diabetes – The Burden in Canada

While diabetes can take a serious toll on a person’s health, it also carries a heavy financial burden.

The Canadian Diabetes Association estimates that by 2020, diabetes will cost the Canadian health care system $16 billion a year. People with diabetes incur medical costs that are two to three times higher than non-diabetics. A person with diabetes can face costs for medication and supplies ranging from $1,000 to $15,000 a year.

Although diabetes has traditionally been thought of as an older person’s disease, more than 50% of Canadians diagnosed with diabetes are of working age – between 25 and 64 years old – according to the Public Health Agency of Canada. As a result, diabetes rates also have an impact on employee absence, disability and benefit plan costs.

The greatest relative increase in diabetes rates is seen in the 35-to-39 and 40-to-44-year-old age groups. This increase in younger age groups is, in part, likely due to growing levels of overweight and obesity. Adults who are obese are two to four times more likely to have type 2 diabetes.

Diabetes – Prevalence and Prevention

Today, about 3 million Canadians live with diabetes. The Canadian Diabetes Association estimates another 6 million are prediabetic.

The number of Canadians with type 2 diabetes is growing dramatically for a few reasons:

• The population is aging.
• Obesity is on the rise.
• Canadian lifestyles are more sedentary.
• Aboriginal people are three to five times more likely than the general population to develop type 2 diabetes.
• Almost 80% of new Canadians come from populations that are at higher risk for type 2 diabetes. These include people of Aboriginal, Hispanic, Asian, South Asian and African descent.

So what’s prediabetes?

Prediabetes is identified when the blood glucose is above normal, but not high enough to be considered diabetes.

Exercise, along with healthy eating and weight loss, can prevent or delay the onset of type 2 diabetes. In one large study, people at risk of type 2 diabetes reduced their risk by 58% by exercising moderately for 30 minutes a day and losing just 5 to 7 per cent of their body weight. In people age 60 and older, the risk was cut by almost 71%.

More Myths of Diabetes

Diabetes affects the young and old, rich and poor, from cultures all across the world. The World Health Organization preaches how diabetes has increasingly become a lifestyle-related disease. Awareness is an important part of the process working towards a solution to stem the growing prevalence.

Here are a few more common diabetes-related factoids. Which are true and which are simply myths?

Myth: Type 2 diabetes only occurs in adults

The truth: At one time, type 2 diabetes was called adult onset diabetes. More and more however, children are being diagnosed with type 2. This is likely as a result of poor diet and lack of exercise.

Myth: Gestational diabetes only affects pregnant women

The truth: This is absolutely true. Gestational diabetes occurs during pregnancy and goes away after pregnancy. Women who have gestational diabetes have a higher risk for developing type 2 diabetes later in life. 

Myth: Diabetes is not a serious disease like cancer or heart disease. 

The truth: Diabetes is very serious. It can lead to heart disease, stroke, blindness or amputations. Diabetes is one of the leading causes of death in Canada.

Click here to visit Part 1 of our blog on Myths of Diabetes

Myths of Diabetes

Diabetes affects the young and old, rich and poor, from cultures all across the world. The World Health Organization preaches how diabetes has increasingly become a lifestyle-related disease. Awareness is an important part of the process working towards a solution to stem the growing prevalence.

While any discussion on the topic can be seen as a positive step towards changing people's lifestyles, misinformation often leads to the spread of unproductive myths. Take a look below at some common myths of diabetes and learn which tips are valuable and which ones need to be reeled in.

Myth: Eating too much sugar causes diabetes

The truth: Not really but consuming a lot of sugar can have an impact.

Type 1 diabetes is caused by genetics and unknown factors that trigger the onset. Type 2 is caused by genetics and lifestyle.

Being overweight increases the risk of developing diabetes and a high-calorie diet contributes to weight gain. Research shows that drinking sugary drinks is linked to type 2 diabetes. 

Myth: People who have diabetes are more likely to catch colds and other illnesses.

The truth: People with diabetes are no more likely to catch colds or other viruses than anyone else. However, having any type of illness can make diabetes more difficult to control. It's recommended that people who have diabetes get a flu shot each year.

Myth: If your doctor tells you need to start using insulin to control your type 2 diabetes, it means you're not managing your diabetes properly. 

The truth: For the most part, type 2 diabetes is a progressive disease. When first diagnosed, many people with type 2 diabetes can keep their blood glucose at a healthy level just by using oral medications. But over time, the body produces less insulin and as a result, oral medications may not be enough.

In everyday language, what is diabetes?

Having diabetes means the body makes little or no insulin and/or the body doesn’t properly use the insulin it makes. The body gets energy by converting carbohydrates into sugar (glucose). The body needs insulin to make the glucose.

Essentially...

No insulin = no glucose = no energy to the brain.

It’s complicated, but simply put:

Healthy Pancreas

Type 1 Diabetes – makes up 10% of cases

• In most cases, you’re born with it
• Pancreas makes little or no insulin
• Occurs most often in children and young adults

Type 2 Diabetes – makes up 90% of cases

• Impacted by genetics and lifestyle
• Insulin resistance and/or pancreas not working properly
• Occurs most often in adults

Will Canada avoid the diabetes epidemic?

Type 2 diabetes is one of the fastest growing diseases in Canada with more than 60,000 new cases each year. The Canadian Diabetes Association says more than 1.8 million Canadians are currently diagnosed with diabetes and that the disease can shorten life expectancy by 5 to 15 years. 

Beyond the obvious health issues, diabetes is costing Canadians. According to Canada’s Diabetic Cost Model, the economic burden of the disease was over $12B in 2010. This amount could increase to $17B by 2020 if left unchecked. 

But it’s not all bad. 

Research shows that lifestyle changes can help prevent or delay the onset of type 2 diabetes. Healthy eating, weight control and physical activity are important prevention steps. In fact, in some cases, type 2 diabetes can be controlled by diet and exercise.

As with any medical condition, being well informed is an important first step. Stay tuned for our weekly posts on diabetes facts.

Brand Name Drugs vs Generic - Part II

What generic drugs mean to business (not just a benefits plan)

The recent National Post article on generic drugs is a topical reminder on the issue of generics, brand names and cost management.   

Generic vs Brand Name drugs

Who says generics and brand name drugs are the same?

Luckily, there’s an independent body that validates whether a generic and a brand name drug are the same - Health Canada. See Health Canada regulates the effectiveness of generic medications. Their regulations are complex and rigorous but ultimately, tests are in place to ensure the generic version of a drug works the same as the brand name for the vast majority of people. 

The Need for Industry Pooling on High Cost Drug Claims

The high cost drug landscape

Over the past decade, on average, prescription drug plan costs have increased between 9-12% each year. These increases have largely been driven by blockbuster drugs such as Lipitor and Crestor.  However, the face of the prescription drug landscape is changing.  Recently, cost increases have slowed due to drugs coming off patent and legislative changes to generic drug prices. Meanwhile the cost and claiming frequency of high cost biologic drugs continues to increase.  

In fact, according to our 2010 data, the total annual cost associated with specialty medications was 97% of the total annual cost of acute medications (such as antibiotics). Based on our figures, the average annual cost per claimant for specialty medications claims is over 136 times higher!

Medical advances have led to a significant increase in the number of high cost prescription drug therapies.  Although their annual costs can be considerable (sometimes well over $50,000 per year), these medications are often life-changing. 

Forecasted growth in the number of high cost drugs available and prescribed in the Canadian market is causing concern among plan sponsors and insurers. This scenario could result in strain for both the plan sponsor trying to control the rising cost of a renewal, and the plan member who may be facing a reduction in coverage of his or her drug therapy.  Given the life-changing nature of these blockbuster drugs, we believe the best approach to managing these costs is the combination of a strong prior authorization process and a mechanism to spread the potential costs across the industry.

The industry solution

Canadian life and health insurers have come together to offer a new drug pooling framework, designed to help protect private benefits plans from the impact of high cost drugs.