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split as to whether a generic policy is modern or not, it’s fair to say that a plan absent of a policy is living in an outdated environment.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.