OHIP+ and private payer impact

As published in Benefits Canada Online http://bit.ly/2A5WBtG

Although a national pharmacare strategy seems elusive, the Ontario government is making a fairly aggressive investment in that area by spending $465 million to boost its provincial drug coverage by covering residents under age 25 and from 65 onwards.

The program, known as OHIP+, begins Jan. 1, 2018. Children and youth under age 25 will by automatically eligible for the plan.

OHIP+ is a simple expansion of the Ontario drug benefit formulary. It covers 4,400 commonly prescribed drugs, such as antibiotics, asthma inhalers, epinephrine, insulin and oral diabetic medicine, birth control drugs, cancer treatments and drugs to treat attention deficit disorder. Provincial formularies are slow to adopt leading edge specialty pharmaceutical treatments because of the rigid review process for including them.

Most employer-sponsored programs base their coverage around drugs legally requiring a written prescription. Those plans would cover about 9,000 drugs, including some slow-release, high-dosage formulations and certain high-cost specialty pharmaceuticals that provincial formularies wouldn’t include.

Many people refer to the Ontario Drug Benefit program and formulary as a benefit for seniors but, because of the wide swaths of individuals covered by it, the label is somewhat misleading. The ODB provides coverage for Ontario residents with valid Ontario health cards who:

  • Receive social assistance benefits;
  • Live in homes offering special care and long-term care homes;
  • Receive professional services through the home and community care services program; or Are under age 65 and encounter high-drug costs in relation to income.

Drugs not covered by the Ontario Drug Benefit formulary may be eligible for funding through the exceptional access program. It facilitates patient access to drugs not included on the Ontario Drug Benefit formulary or where no listed alternative is available. In order to receive coverage, the patient must be eligible to receive benefits under the Ontario Drug Benefit program.

In the case of a child or youth who had previously had coverage for a specialty drug under a private plan, it will be very important for that person to apply for coverage under the exceptional access program as patients must qualify for the particular therapy based on certain criteria. Physicians have received notification to begin submitting exceptional access program requests for their patients prior to the Jan. 1, 2018 start date. Without proper co-ordination, children and youth might find the pharmacy benefit manager will restrict access to certain drugs after Jan. 1, leaving the member scrambling for alternatives (the exceptional access program application process can take up to six weeks for specialty biologic drugs, depending on the priority).

To facilitate the conversion, insurers and pharmacy benefit managers will no doubt provide a grace period of some duration to allow sufficient time for the exceptional access program process. That will delay savings to private payers but it will ensure there are no gaps in care for children and youth who are already on a drug currently covered by a private plan but that’s eligible for the exceptional access program.

Will plan sponsors save money?

Plan sponsors looking for relief from steadily increasing drug premiums that have risen much faster than the roughly two per cent annual inflation rate may see some relief. How much relief they’l see, however, is uncertain. Innovative Medicines Canada had forecasted a 5.8 per cent annual growth rate in drug costs between 2016 and 2018, but the predictions are that OHIP+ might yield savings of between three per cent and 10 per cent in 2018, depending on the demographics of the insured members and the speed of conversion from private plans to the provincial program. In the end, the savings may at least neutralize forecasted growth assumptions.

Cynics may question whether insurers will, in fact, lower health-care rates. Regrettably, we fear private payers with traditional fully insured benefits plans may never see the full impact of the savings from OHIP+ due to the various utilization and pooling adjustments levied by insurers. Plan sponsors that have administrative services-only plans will, however, see the full savings through lower costs for drug claims.

Having said that, at least one of the big insurers in Canada is starting to pass on individual reductions in health rates on January 2018 billing statements. The first such notification showed a reduction of 11.8 per cent.

What should happen after January 2018

As of Jan. 1, children and youth will have to show their provincial health cards at the pharmacy. The expectations is that pharmacy benefit managers will update their processing systems to automatically reject prescriptions that should go to the OHIP+ program.

Under the terms of the program, pharmacies can’t charge any price differentials to private plans. Thus, users should have no copayments or deductible costs. In addition, it’s important to note that pharmacies will receive the same dispensing fee as with the Ontario Drug Benefit program.

The Trillium drug program remains an option for Ontario plan members for drug expenses not covered by OHIP+ or the exceptional access program. Whether a private plan partially covers a drug or not at all, the Trillium program, upon application and approval, will provide coverage for approved drugs once a person reaches a quarterly deductible equivalent to up to about four per cent of net family earnings.

Where things get blurry is with respect to household members where a child or youth is already in the Trillium program. Those individuals will no longer contribute to the household deductible. Their claims through the OHIP+ program won’t contribute towards meeting the household’s quarterly deductible.

Private payers will still face some costs

In certain situations, such as where eligible youth are studying outside of Ontario, private payers will see no savings. More commonly, since the Ontario Drug Benefit formulary includes less than half of the 9,000 drugs covered by most plans, private payers will be responsible for the full cost of medications not eligible for OHIP+.

And for those plan sponsors that have resisted the trend towards mandatory generic substitution, what will happen as of Jan. 1, 2018, is that if a doctor writes “no substitution” on the prescription, the private payer plan will pay for the cost of the brand-name drug as it’s unlikely OHIP+ will cover it.

Similarly, if the plan honors branded drug pricing, the patient can insist on the brand-name medication. With many generics priced at 25 per cent or less of the cost of the brand-name drug, plan sponsors will be unhappy to find out that insured child and youth plan members aren’t taking advantage of universal benefits provided by the government. If coupon cards didn’t invoke a shift to mandatory generics, perhaps OHIP+, when fully understood, may be that catalyst.

What should plan sponsors do?

Communicate, communicate, communicate: Post every and anything from their insurer or pharmacy benefit managers in regards to OHIP+ and their insured members.
Encourage staff who may have dependants on a high-cost specialty drug to enrol in the exceptional access program in advance of Jan. 1, 2018.
Consider amending the drug plan to implement mandatory generics substitution.

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Drug benefit apps providing alternatives and pricing

Rising prescription drug costs is not an unfamiliar topic to the vast majority of plan sponsors.  The message from advisors is to encourage members to be wiser consumers.  Plan members often learn at the pharmacy counter that the Pharmacy Benefit Manager (PBM) or Insurer was not paying for the full cost of their prescription, either because the drug prescribed was not a generic, or because the script was not the first line therapy for a stated condition.

The discussion should start at the doctor’s office and not at the pharmacy counter, but even with the prevalence of  Electronic Medical Records (EMR’s) privacy and data safe guarding concerns seem to limit the integration of these records with Insurance coverage information (particularly dependent coverage situations).

Doctors do not know drug prices and traditionally prescribe from a list of perhaps 300 common drugs versus the over 10,000 Drug Identification Numbers (DIN’s) in the coverage universe. Until this conundrum is resolved, it may be prudent for plan sponsors to provide tools to me members, so members can perhaps make wise decisions about the prescribed drug before even leaving the doctor’s office.

The most recent app based solution released just yesterday is called Drug Finder from the Reformulary Group,  a leading, Canadian independent drug plan management company.

The other app based program that we actually like more is the Medavie Blue Cross Drug Cost Compare.  The Medavie app is actually geared to treating health professionals and not consumers, but we like it because drugs are broken down into price bands, so one is able to see visually, what the impact is of being prescribed an alternative medication. This is particularly useful if the member is subject to a copay or coinsurance through their plan.  The covered drugs categories is nowhere as robust as that of Reformulary solution, as it only covers the seven most common therapeutic categories.

DrugFinder™ App For consumers

This App allows Canadians to search prescription drugs and look up the drugs that provide the best combination of clinical and cost-effectiveness. DrugFinder enables users to make informed drug choices based on scientific evidence and independent medical advice — thereby giving them greater control of their health.

How it works – DrugFinder is an online tool that searches the Reformulary®, a list of drugs reviewed and handpicked by clinical experts. Users can search by drug name or medical condition, find out how much of the cost is reimbursed, and look up if there is an alternative drug that works just as well. A new feature, users can now keep track of their medications in DrugFinder’s virtual Medicine Cabinet, and sign up for alerts about alternative drugs available and new drugs on the market, as well as other health-related information. The DrugFinder app is available on the Apple App Store and Google Play Store. For more information and to use DrugFinder, visit: www.drugfinder.ca

Drug Cost Compare AppFor Health Professionals

The Drug Cost Compare app for iPhone and iPad gives health professionals across Canada the ability to quickly compare the cost of drugs within the same therapeutic class, helping them choose the most appropriate, cost-effective option for their patients. When you prescribe medication for your patient, and more than one product is available, would knowing their costs help you choose?

  • Compare the cost of oral drugs in the seven most common therapeutic categories
  • Compare drug costs at a glance with colour-coded results ranking drugs from most affordable to highest cost
  • View information about generic alternative availability and inclusion on most Medavie Blue Cross formularies
  • View pricing information based on the province selected
  • Can be used for patients with or without drug coverage

With Drug Cost Compare, a health professional can ensure patients are being prescribed a solution that fits their needs therapeutically, while also helping to lower their out-of-pocket expenses—whether they are covered by a drug plan with a co-pay or are without coverage altogether.

Medavie Blue Cross created this app as part of their efforts to help improve the affordability and sustainability of drug costs in Canada. When all stakeholders have access to accurate information, the thought is that they can all make informed choices with personal health and help set the future course for the healthcare system.

The Drug Cost Compare app is available on the Apple App Store.

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The benefits adviser (an endangered species) per HR Tech


Twenty-five years after graduating university, I can reflect on numerous client interactions as an Analyst, Group Representative, and later as an Independent Adviser. Employment does not equate to competence, so whether I add any more value to the client relationship, more so than my counterpart at another benefits firm can only be answered by my clients.

Judging by similar locks of grey I see at seminars and functions, my experiences in the benefits industry is not unique. Over the years, some of the more aggressive competitors have acted like ‘crabs’ to pull down advisers in their quest to gain a competitive advantage, but in the last couple of years it has not been those firms but rather so called, HR technology firms who are looking to take down the advisory profession.

Listen, I get it. The benefits industry was ripe for change. For decades, advancement in technology meant coming up with a smart phone app. Going paperless even has been a 10 year long project. So while terms like “on-boarding” is used by US companies with sophisticated systems, the benefits industry in Canada, continues to rely on paper enrollment and refuses to create meaningful interfaces between Insurers and Payroll Providers. If it ain’t broke, don’t fix it, and certainly don’t invest in the infrastructure to fix it.

In the interim, Insurers continue to pocket millions in administrative savings from the use of online administration systems that made hundreds of back office administrators, previously responsible for supporting member changes etc. redundant. With plan sponsors responsible for additions, terminations and other changes, accuracy goes up and calls to the Insurer goes down. Yet, most Canadian Insurers have failed to invest in technology or infrastructure so as to be a leader in Insurtech.

So, the Industry was ripe for change and we can thank Zenefits and other HR based platforms for bringing innovation to the marketplace. Increasingly, smart software engineers with the right amount of seed capital or funding are attempting to turn this industry on its head and it is working.

Insurers who chose not to invest in technology over the last 20 years, through their investment subsidiaries are now heavily investing in these HR tech companies in an effort to remain relevant. Companies such as Power Corporation, Sun Life and RBC have secured cozy relationships with these companies to hedge their bets on a digital transformation that they dare not miss. Their previous complacency has left them vulnerable and rather than innovate, at this point they can only provide the backing to more nimbler startups.

As an advisor who has been witness to the ‘glacial’ pace of technological advancement in the benefits industry, I too perhaps am culpable. Perhaps this gives license to the ‘culling of the heard’ mandated by almost all HR Tech firms who seem to see my involvement in the benefits equation as an impediment to the operation of their business and perhaps more important, a lucrative IPO to monetize granted stock options.

Recently, I read a US publication where an advisers message to the small business market she serviced was this, “we are actual insurance advisers, and not a software company with an insurance license. You’re going to get the expertise, access to the market, and the personal touch because we understand your space”. This adviser later went on to say that all of the bells and whistles technology that is available by way of technology firms, are also solutions that her team is quite capable of bringing to the table. This message resonated with me and I think it is worth noting.

When did advisers become the hunted. That was the question I asked myself after watching a video from one of the more well know technology companies. The video was intended to provide their prospects with information on ‘evaluating one’s broker’. (I actually prefer the term adviser, but if broker conjures up the image of bloated indifference then I guess that is fine). Months earlier, before a ‘pivot’ by that same firm, they had thought the broker/adviser channel was infact a market that they wanted to pursue but I suspect this strategy was abandoned after push back from the advisory community who on mass refused to support unrealistic growth targets that if not met resulted in contract termination and a loss of all future revenue from the client the advisory previously brought in. Whatever the case, this firm is now squarely focused on the B2B market.

I am not entirely sure, going alone is the right long term move for that technology company, because after listening to the initial adviser roadshow, I recalled thinking, wow this is fantastic technology, but these folks can hardly spell Group Insurance, how are they going to consult clients on how to manage their compensation budgets?

Whose vision of the customer will ultimately triumph is above my pay grade. If the experiences of fin-tech is any guide, even large robo advisers have had to employ numerous ‘humans’ with ‘real life experiences’ to provide millennials and others with investing advice. Technology was an asset but not the full solution; so far.

Algorithms can no doubt scan textbooks, review legal judgments, perform low level AI functions, but to say they can replace a professional’s knowledge and know-how, I believe is a stretch right now in 2017. Technology is just another resource to help professionals more proficiently manage their client relationships.

In an advisory practice it is difficult enough to understand the various tax codes and human rights decisions and legislation in context of changing attitudes and HR trends. But it’s the interplay of these various structures on employee benefits that make our job unique. To suggest that a technology application can more effectively provide meaningful guidance to a plan sponsor; well, I am not convinced. Clearly, if an adviser is adding zero value and is a dinosaur that barely does enough continuing education (rather than 4 times the required) then yes, that adviser is ripe for ‘replacement or culling’.

Speaking of ripe, the industry is ripe for a shakeup. Insurers have to do a much better job of investing in meaningful technology to provide customers with a paperless, electronic experience, that quite frankly is overdue. A move by CLHIA and perhaps government to stimulate the use and acceptance of electronic signatures would be the catalyst of much needed innovation and would spell the end of paper enrollment forms for beneficiary designations.

To those technology firms, specifically HR tech, that are giving away free vacation scheduling, on-boarding and HR platforms to clients in the hopes that they will ‘fire their brokers’, I get your message, but I don’t see why my 25 years in the business is suddenly worth nothing because your version of “HAL 9000” says so.

On a recent trip to Vegas, I had the opportunity to use an AK47 assault rifle, but on a range and under the competent watch of a trained instructor. I quickly realized that putting a loaded gun into the hands of someone not trained could easily have deleterious and unintended consequences. Just as Google remains a great place to obtain medical reference, much of the information is biased and is not vetted. So, using this information to self-diagnose and self-medicate is probably a bad idea.

HR platforms relying on code and software engineers to navigate the minefield of labor management, employment equity and changing legislation is to me, that same AK47.

Not all my clients see the value in covering pet food and unlimited wellness as a perk for which the employer must provide funding. To suggest that after massages, paramedical, and dental expenses that an employee has the ability to fund a specialty medication with limited out of pocket “pain” is a stretch for me. For an invincible generation of millennial type employees who have just entered the workforce and have not been witness to sickness up close, they will certainly have a particular view of what is relevant to them and that is OK. My job is not to argue with that view but to support the plan sponsor in making sure that the benefits program is congruent with the philosophical views of the company who is paying the bills. If taxable wellness accounts is a priority to that plan sponsor, then it will be part of the solution we put in place.

Alas, not all technology firms mandate a replacement of the advisory channel, some notable firms in particular (one in Calgary Alberta and another in Vaughan Ontario), continue to see the value in advisors as a part of their service delivery model. For the sake of the industry, I hope those two firms have made the right bet.

To their credit, Zenefits and the like have forced advisers and perhaps Insurers to review processes that quite frankly had become stale and to advance the consumer notion. “Customer experience” which is itself a buzzword today had always taken a back seat but because of these new market entrants (so called disruptors) customer experience is squarely in focus. If nothing else disruption or disruptors can take credit for forcing the advisory business to review and update processes that are outdated. As for me the, Independent Adviser, my message to HR Tech, I am not the prey! If you look closely, beyond the IPO and stock option, you will notice that I am wearing the same neon orange vest as you. Maybe if we work together, we can spend less time hunting and more time feasting.

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2016 DRUG TRENDS AT A GLANCE (Express Scripts Report)


In 2016, Express Scripts Canada’s analysis of private-plan spending trends once again reflected opposing cost forces.  Factors driving an increase in drug spend have outweighed downward pressure on drug costs. At the same time, high-cost drugs and high-cost patients continued to create troubling trend acceleration.

These new medicines offer high cure rates for formerly incurable diseases, transform previously fatal diseases into chronic conditions, and provide a much greater quality of life for many Canadians. But the often staggering costs of these drugs have created unmanageable financial burdens for families and plan sponsors. More and more patients are finding they can’t afford the medications their doctors prescribe them. More plan sponsors are limiting employee access to treatment coverage in an attempt to protect plan sustainability without understanding that they have better options.

Parallel to these developments is the ageing of Canada’s population and the related increase in chronic diseases. Of greatest concern to private plan sponsors is the rising number of working-age individuals with multiple chronic conditions that require numerous treatments often prescribed by many doctors and specialists without care coordination.

The combined result of these factors is treatment complexity that, without effective intervention, overwhelms plan members and potentially leads to worsening health and more expensive therapies. These members need expert guidance at key decision points. Sponsors need to implement effective plan management solutions now, before cost increases become insurmountable.

Over the last three years, these forces—extremely high-cost drugs and the rising number of plan members with multiple chronic conditions—have garnered increasing public attention. For plan sponsors, however, the perception of urgency has been lessened by the corresponding effect of generic pricing.

We are now at a crossroads -the cost impact of patent expiries is slowing, while that of high-cost drugs and patients with multiple chronic conditions continues to accelerate.


Astonishingly, just 14% of plan members account for 72% of total plan spending.

In 2011, members with annual claims of more than $10,000 represented 18.1% of total spending; by 2016, that number had increased by 60%, up to 28.8%.

The evidence shows that individuals with total annual claims between $1,000 and $10,000, and those whose annual claims are over $10,000, need help:

  • Making treatment decisions;
  • Managing their multiple chronic conditions (an average of 5.9 and 7.3 respectively);
  • Coordinating care, provided by an average of 3.4 and 4.5 physicians respectively;
  • Managing their many medications, an average of 8.3 and 10.5 respectively.

Innovative solutions are required to help these members make better decisions to manage their overall costs and health.

In this rapidly changing environment, most Canadians simply do not have the clinical knowledge they need to determine which drug is the most cost-effective, clinically appropriate option for their treatment. The difference between the best decision and a sub-optimal decision can be tens of thousands of dollars. Express Scripts Canada’s research shows that optimizing spending on traditional maintenance drugs through pharmacy services that engage patients and influence better decisions can help fund access to new high-cost drugs.

Spending on high-cost specialty drugs (those used to treat complex, chronic conditions such as severe rheumatoid arthritis, hepatitis C and cancer) has grown from 13% of total drug spending in 2007 to 30% in 2016.

Tighter plan management and the successful completion of treatment for many hepatitis C Canadian patients moderated the specialty trend to 3.2% in 2016, a welcome respite after years of double-digit increases.

Excluding hepatitis C medications, however, the specialty category trend was 10.7% in 2016.

One out of every five dollars spent on prescription drugs in 2016 paid for medication for diabetes or an inflammatory condition.

Trend on inflammatory conditions was 11.7% primarily due to an increase in utilization including expanding indications for high-cost, anti-inflammatory medications.

The uptake of newer, more expensive diabetes drugs contributed to a trend of 13.7% in this category. But our analysis also shows that an alarming number of patients were not treated in accordance with the Canadian Diabetes Association’s Clinical Practice Guidelines, an example of an opportunity to potentially improve care while lowering
costs with tighter plan management.

There was also double-digit trend growth on cancer and attention-deficit hyperactivity disorder medications during 2016.

Biosimilars—drugs that provide alternatives to high-cost biologics that have reached patent expiration—are entering the market, but the associated cost savings is not comparable to that of generic drugs.

Cancer treatments dominate the drug development pipeline, and a continued shift from hospital-administered drugs (covered by public plans) to self-administered drugs is expected to mean more claims and higher costs in the future.


Given the number of challenges each plan member is currently facing, lightly managed plans—those that only react to claims—cannot control rising spending or help members achieve better health. But by focusing their plan management efforts on empowering these members to make more effective, informed decisions, sponsors can protect the long-term
sustainability of their drug benefit while supporting better health outcomes for employees and their families.

Tightly managed plans align drug utilization with clinical guidelines, empower members at critical decision points and provide comprehensive care to members with multiple chronic conditions. These plans leverage clinical expertise and data analytics. In addition, they incorporate synergistic management techniques, including formulary, utilization and clinical management tools to provide the best possible patient care at the lowest possible cost.



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Jan. 2017 Employment Insurance (EI) Changes

Earlier this year, the federal government unveiled a number of changes to Canada’s Employment Insurance (EI) program in its initial budget, including a shorter waiting period for EI benefits. The proposal was adopted in June 2016 and will go into effect on January 1, 2017.
Benefits are currently paid for 17 weeks, including a two-week waiting period. Starting January 1, 2017, the total benefit payment period will be 16 weeks — a one-week waiting period and 15 weeks of payments.
The federal government has published a draft regulation to change the EI Regulations’ provisions on the EI Premium Reduction Program (PRP) and the Supplemental Unemployment Benefit Program (SUB program).

If you have a LTD plan but no STD plan, a reduction in the LTD waiting period will help avoid a gap in coverage. Here’s what would happen if you do not amend your plan:

  • Week one (no EI benefits)
  • Week two to 15 (EI benefit period)
  • Week 16 (no EI or LTD benefits)

Next steps
The government has prepared a communications plan and intends to contact all plan sponsors that participate in the PRP or that have set up an eligible SUB plan to provide them with details about the legislative changes and the transition period.
Plan sponsors that participate in the PRP will have to assess the terms and conditions of their plans and determine whether they have to make changes to some of them to ensure their plan continues to meet the programs’ requirements.
The government has also prepared a strategic communications plan to inform the public about the changes to the EI Act and Regulations.


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