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Workplace Rx: use data to lower benefit costs; invest in wellness

February 1, 2014

Source: TELUS—A Living Lab case study – by TELUS Health

Like any plan sponsor, TELUS, a leading telecommunications company, recognizes that offering an excellent healthcare benefit plan is one of the most powerful ways to attract, retain and engage top talent.

A thoughtfully designed healthcare benefit plan is not only a key competitive differentiator for plan sponsors, it also plays a critical role in ensuring the sustainability of their human resource offerings.

As the costs of healthcare benefit plans continue to spiral upwards, the need for meaningful data to make informed decisions is becoming imperative. In a recent 2013 TELUS Health plan sponsor survey1, 80% of those surveyed experienced cost increases for their benefit plans in 2012. Plan sponsors cannot keep absorbing even these small increases indefinitely.

When plan sponsors take on cost increases, the traditional practice has been to absorb the cost and carry on. But the 2013 TELUS Health survey suggests change is coming; nearly one in four plan sponsors reacted in 2013 by passing on an increased share of costs to plan members, or simply changing the plan design.

Key healthcare cost drivers:

  • High-cost biologics.

The new high-cost medications used to treat conditions ranging from rheumatoid arthritis to cancer are cited as one of the top sources of concern when it comes to future sustainability. While few plan members use these drugs, they nonetheless account for 20% or more of the entire drug spending today—and this figure is expected to rise substantially over the next decade.

  • An aging workforce taking an increasing number of medications.

The massive impact the baby-boomer generation has had on every aspect of society continues to reign when it comes to healthcare.

  • Unsustainability of the current Canadian healthcare system.

The Canadian healthcare infrastructure is under enormous pressure across the country, resulting in increased wait times, access issues and under-resourced facilities. Ultimately, these factors also end up affecting the health of plan sponsors’ workforces.

Plan sponsors everywhere are grappling with the need for cost-containment measures—continually trying to achieve a balance between mitigating the impact of drug cost increases and encouraging and promoting plan members’ good health.

Two fundamental questions consistently arise: What can plan sponsors do to contain costs, and how can they be sure the actions they take will have the desired impact?

Building the best and most cost-effective benefit plan.

TELUS prides itself on offering a comprehensive benefit package to ensure its plan members and their families have the support they need, as well as to provide its workforce with adequate coverage and peace of mind.

But TELUS is also impacted by the inflationary effects of drug cost increases.

“Between 2001 and 2011, our benefit expenses doubled,” explains Carol Craig, TELUS HR Director for Benefits. “While we absorbed a large share of these increasing costs, plan members also had to pay more. The situation was unsustainable and we knew we had to take action. But where to start?”

TELUS—A Living Lab.

There’s a truth every company knows: You can’t manage what you don’t measure. In early 2012, TELUS decided to leverage the expertise of the TELUS Health Analytics team to conduct a comprehensive assessment of its health benefit plan. This analysis would not only establish a baseline for the current situation but also highlight the opportunities for savings.

The recipe for success.

The Health Analytics team examined drug claim data from its 30,000+ plan members, ran baseline numbers and assessed the findings. The results were surprising.

TELUS Health’s research clearly indicated that there are clear design change opportunities that can optimize its plans while containing costs—all without negatively impacting plan members.

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