Top questions for your insurance provider, plan broker or advisor

  • Can you provide details on drug, health, and dental benefits utilization which impacts my health premiums?
    • Can you provide a detailed breakdown of our overall drug costs and which medications/diseases are having the greatest impact in our workplace?

      Are we seeing growth in the number of claims and cost per claim? If so why?

      How will our current paramedical practitioner costs (physiotherapy, chiropractor, massage therapy) impact our overall health plan premiums?

      How does our paramedical usage compare to the averages you see?

      Are there steps we can take to improve our plan efficiency in these benefits?

  • Are we part of a Preferred Pharmacy Network (PPN) which can help lower my overall drug plan costs?
    • Do you offer a PPN that can help lower the cost of a prescription such as negotiated lower mark ups for specialty medications, if so how much can we save?

      For certain chronic disease medications do they offer larger fill volumes reducing the need for monthly refills?

      What is the availability of pharmacies in the network vis-à-vis plan members’ residence? Are there pharmacies nearby for all plan members? Will plan members have to travel farther to pick up their medications?

      Is there an exception process for a plan member who won’t or cannot change pharmacies?

      How will the PPN be communicated to plan members?

      What tools are available to plan members to find a PPN pharmacy?

      How much can we save? How will cost savings be measured?

  • Is our plan mandatory generic?
    • How will plan members currently taking a brand name drug that has a generic alternative be handled? What is the exception process?

      How will plan members with a prescription for a brand name drug that has a generic alternative be handled? Is there an exception process?

      What are the potential savings?

      How many plan members could be impacted?

  • Which drugs require prior authorization and why?
    • What are the criteria based on? Clinical evidence? Cost?

      What are the potential savings of prior authorization?

      What is the impact of not implementing prior authorization?

  • Managed formulary
    • What are the preferred treatment options?

      What evidence was reviewed to support the recommendations?

      What costs and benefits were considered when comparing medications to choose the preferred one?

      What communication tools are available for plan members and their physicians to understand what is covered by the managed formulary?

      How often will new drugs be reviewed?

      How will decisions on new drug covered be communicated? Will the rationale for coverage decisions be shared?

      Who manages the formulary? What qualifications do they have?

      What savings will the formulary offer my drug plan? How is the value of the managed formulary assessed? How will actual cost savings be measured?

      Is there an exception process available for plan members? How does this work?

      When the managed formulary is being introduced for the first time, will plan members who are currently being treated with medications that are not on the preferred drug list, will they be grandfathered?

      Will drugs ever be removed from the formulary or moved to a lower tier with reduced coinsurance? How will this be communicated? How will members currently taking these drugs be handled?

  • Maximums and annual caps
    • Are we limiting medication access to the patients who need the medications the most?

      Are there other types of plan designs or underwriting arrangements that could be considered for a similar cost?

      What are the potential savings?

  • Will the new program recommend plan members switch from the drugs prescribed by their doctor?
    • What evidence will be used to support the switch?

      How will this be communicated to the pharmacist, physician and plan member?

  • Duration and frequency of treatment
    • It is important to understand how frequently and how long drugs are used for a particular treatment. Some drug therapies may be used quite frequently in the patient’s first year of treatment and then less often in subsequent years. Another drug in the same therapy class may be used more evenly over the same period. Or, a drug therapy may be used for a fixed treatment duration, whereas its alternative should be taken indefinitely or for a longer duration. Consequently, if we look at a patient’s first year of treatment only to compare the cost of these drugs, we may not get an accurate picture of their relative costs. To account for fluctuations in treatment over time, it would be wise to consider a longer time period following the date the therapy started. Ideally you’d like to look back over a five year period to annualize the cost of a drug.

      There are also could be additional pharmacy dispensing costs for drugs that will require more frequent dosing, and therefore have shorter dispensing day-supplies. There may also be more frequent dosing for generic versions of therapies than the brand equivalents depending on the laws around pharmacist remuneration in different provinces, which would drive up the cost of the generic version.

  • Concomitant treatments
    • Some new treatments replace older therapy while others are added onto existing ones. Therefore, the cost (again, annualized over a 5-year period ideally) of these background/concomitant/previous treatments need to come into the equation when comparing the cost of a new medication that essentially removes the need for additional, concomitant treatments.

  • Adherence
    • There is a large body of evidence demonstrating that poor or non-adherence to treatments cost more in the long-run due to direct drug costs (e.g. longer duration of treatment and wasted drug usage), but also due to indirect costs such as lost productivity, absenteeism, disability, not to mention other healthcare costs.

      As a plan member or employer trying to compare costs between treatment options, you should consider this: Is there Real-World Evidence to suggest or validate that a treatment option will deliver better plan member adherence? In other words educate yourself and make informed decisions.

      For example a drug in pill form may be cheaper, but it requires a patient to take it regularly every day. If the patient doesn’t adhere to that schedule, they may not get the full benefit of the drug. A similar drug that is administered by injection once a year could be more expensive than the pills over the same one-year period, but it has the value of not requiring the patient to adhere to a strict medication schedule and it could produce better patient outcomes.

      Likewise, switching from a pill that is taken 3 times a day to once a day or to a pill that combines 2 different medications, represents not only a reduction in the pill burden that could vastly improve the adherence and the effectiveness of the drug, but also could provide social benefits like reducing the risk of diversion and easing the burden for caregivers.

      Impact on productivity and bottom line

      In addition to comparing drug costs across different therapies, there are some additional considerations when comparing the relative benefit of medications.

      • How does this condition impact employees and their ability to work?
      • How will sick days, productivity, and short and long term disability be impacted by the employee’s ability to access the treatment? What benefit do the medications provide to the patient in terms of their quality of life?
      • How do these benefits translate into positive outcomes for the company? What is the impact on a company’s bottom line?
  • The Cost of Your Claim
    • costofprescription

      There are several additional costs that get added to the actual price of the medicine to round up your total claim amount.

      First, there are markups added to compensate the distributor and the pharmacies that stock the product (i.e. wholesaler and pharmacy), as well as a pharmacy dispensing fee.

      The markup is usually a percentage added to the cost of the drug, so this amount varies considerably depending on the actual cost of the drug dispensed.

      The dispensing fee is normally a fixed amount charged by the pharmacy regardless of the cost of the drug prescribed. For a low cost prescription, the dispensing fee can sometimes be even greater than the actual drug cost.

      There can be variability in the amount of dispensing fees and markups charged by each pharmacy, and even within each pharmacy these often vary significantly between the type of payer (no reimbursement coverage, or government provided plan (public), or employer-sponsored benefit plan (private). Generally speaking, those who pay out of pocket and employer-sponsored plans are charged higher dispensing fees and mark-ups. Depending on the province, generally this ranges between $12-$16 of dispensing fees per prescription, and 10-15% of markups.

      It’s important to know that these costs can vary based on where you pick up your medication. Employers can have specific arrangements with insurance providers to negotiate lower fees and markups with pharmacy chains in order to ensure cost effectiveness. Other costs can include the duration of treatment, the frequency of dispensing, potential for non-adherence, and the cost of alternatives being replaced, as well as indirect costs such as the productivity/quality of life cost of not taking the prescribed medicine.

      Secondly, the frequency of dispensing also impacts the total cost. A chronic medication which is taken continuously could potentially incur higher total prescription costs over the long term if the volume of prescription is smaller and requires more frequent refills.

      Thirdly, non-adherence to a prescribed drug will incur extra costs due to waste, as well as due to poorer health outcomes and productivity losses.

  • Chronic disease
    • Chronic diseases are the number one problem in the workplace, according to Greenshield’s April 2016 Inside Story.

      1. 3 out of 5 Canadians older than 20 have a chronic disease and 4 out of 5 are at risk of developing one (Source: PHAC 2014)
      2. There were an estimated 2.7 million Canadians living with diabetes in 2010 and that number is expected to rise to 4.2  million by 2020 (Source: Canadian Journal of Diabetes, 2013)
      3. Costs associated with treating diabetes was estimated at 12.2 billion in 2010 and projected to rise to 16.9 billion by 2020 (Source: AstraZeneca, Great-West Life, Cubic 2013)

      Sanofi Canada’s 2015 Healthcare Survey found that 45% of employees reported they’d been diagnosed with a chronic disease such as diabetes, arthritis, and depression. When high blood pressure and high cholesterol were included, that number rose to 56%. Among those 55 and older, a staggering 78% reported a chronic disease.

      Chronic diseases are also responsible for the majority of prescription medicines in the workplace. In fact, it represents almost 90% and 95% of drug use for 50s and 60s age groups, respectively. More than 70 per cent of drug plan costs are by the 35 to 65 age group, according to the Greenshield June 2015 Inside Story. Chronic disease also takes its toll on our economy. According to the Public Health Agency of Canada, chronic disease consumes “67% of all direct healthcare costs, and costs the Canadian economy $190 billion annually – $68 billion of which is attributed to treatment and the remainder to lost productivity.” (note, productivity losses in the public agency figures do not include productivity losses due to presenteeism).

      According to a report by the House of Commons Standing Committee on Health, “90% of type 2 diabetes, 80% of coronary heart disease, and one third of cancers could be prevented by healthy eating, regular exercise, and by not smoking.”

  • Spotlight on mental health
    • According to the World Health Organization (WHO), “More working days are lost as a result of mental disorders than physical conditions” and according to the 2015 report from the Canadian Chronic Disease Surveillance System (CCDSS) on Mental Illness in Canada, mental health issues are the primary cause of short-and long-term disability in Canada.

      • Direct costs (hospital care, physician care and drug expenditures) associated with mental illness were $8 billion in 2008 in Canada. (Source: CCDSS)
      • Indirect costs related to mental illness (costs associated with disability claims, lost productivity at school and work due to absenteeism and presenteeism, and social and judicial services) in Canada exceed direct costs and range from $11 to $50 billion. (Source: CCDSS)
  • Medication adherence
    • According to the WHO, adherence for chronic diseases is poor across the globe. In developed countries adherence rates average only 50% and even worse in developing countries. Poor adherence was found to lead to poor health outcomes and jeopardize patient safety, and to increase health care costs.

      According to a Greenshield study, medication adherence is extremely poor for chronic conditions, ranging from 37% for hypertension drugs, 43% for high cholesterol, 55% for depression, and only 45% for diabetes medications. A recent study by the Conference Board of Canada found that non-adherent patients taking medications in various chronic drug therapy classes were only 57% adherent (statins, ACE inhibitors, statins & ACE inhibitors combined, inhaled steroids, smoking cessations, biguanides, and biologic response modifiers).

      Studies conducted also point to the higher costs and poorer health outcomes associated with not taking medications as prescribed and the savings that result from improved compliance. (Source: NCBINCBI)

      Notably, a recent Conference board of Canada study estimated that improving compliance in chronic disease patients in Ontario over the course of 2013 and 2030 would generate benefits that far outweigh the additional pharmaceutical costs of compliance by a ratio of at least 3:1 for 7 out of 8 classes, and up to 6:1, totalling savings and benefits of $3.7 billion, including $1.1 billion in savings of direct health costs and $2.6 billion in social benefits.

      As a result, insurers and employers are initiating programs to improve medication adherence and promote a healthy lifestyle by focusing on prevention.