The Benefits Investment: Who pays? Who gets the benefit?

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Today in Canada about a third of our healthcare costs are paid by the private sector largely through employer sponsored benefit plans. The share of public spending on healthcare services for Canadians has been flat if not declining for a number of years even though there are significant pressures increasing healthcare expenses.

Private sector employers are increasingly under pressure to reign in if not cut back benefits plans leading in some cases to reductions in coverage and forcing more of the cost on to employees. The long-term impact should be obvious to all.

It seems like every day new and more effective biologic-based treatments are being made available to treat an ever increasing range of illnesses.  These treatments are revolutionizing healthcare in many ways not the least of which is the incredible expense of some of these drugs.

Inevitably this raises questions about who should pay and these questions will increasingly find their way to C- level discussions in many organizations. And when they do, there’s no simple answer to any of them.
Too many organizations are leaving themselves vulnerable by not understanding their risk and not working proactively before it’s too late. They haven’t done the work to understand the limits of their plan in their coverage nor have they worked with their employees to increase their understanding and manage expectations. Most employers are alarmingly underutilizing even the most common drug cost-containment strategies. In this context the potential for significant cost exposure is real.

For most employers it’s not a question of if but when one of their employees is going to arrive at work having been prescribed a drug that could cost as much is $6000 a month to treat their cancer.

But who benefits? Clearly and most importantly it’s the patient, the employee. The employer obviously benefits to by having a productive and experience employee contributing to their organization. But so do provincial health insurers because most of these patients are kept out of provincially funded hospitals. It’s an important but subtle shift that both employers and employees need to be aware of.

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