Employee benefits plans not reflecting Canada’s health challenges according to new study

April 8, 2015

TORONTO, (April 8, 2015) -- A year-long study of health benefits usage by Green Shield Canada has revealed some startling facts for both health benefits providers and employers. For the first time in the health benefits industry, data from the comprehensive study includes prescription drugs, eyewear and paramedical services, and it shows how benefits programs are being used and that the dollars spent do not align with the predominant health challenges facing Canadians.

For example, the study showed that Green Shield Canada’s clients spent approximately $144-million on glasses, orthotic shoes, and chiropractic and massage services last year. Yet, only $100-thousand, or under 1% of that amount was spent on dietitians and nutritionists. This despite studies showing type-2 diabetes has doubled in Canada since the year 2000 and eating habits are a significant contributor to the disease.

Most surprising was the rapid increase of paramedical services at younger and younger ages, including chiropractic care for infants and massages for teenagers. The highest expenditure of any service was for massage which starts in the 20s age range and continues well through the 50s. This trend is seen at a time when chronic disease such as hypertension, high cholesterol and diabetes increasingly dominate employee populations and drive significant costs to the health care system.

Green Shield Canada does not advocate discontinuing coverage for paramedicals, but suggests there is a risk that they are increasing at the expense of other critically important health strategies and treatments. “The plans and the spending habits of Canadian employees and their families are growing apart from the largest health challenges that face them. What employees and their dependents like and want versus what they may need must be balanced better for the future,” says David Willows, Vice President, Strategic Market Solutions, Green Shield Canada. “The industry and employers need to re-orient how we look at benefits plans given the reality of how they are being perceived and used.”

What the future holds demographically for Canada and its employers is another cautionary tale. The Baby Boomers are aging and costs for treating their health issues – largely associated with chronic disease – are escalating, with fewer people shouldering those costs. In the 1960s, there were eight working people for every senior. In the coming decades the ratio will fall to only 2:1, raising the question of where the required funding for health care will be secured.

Escalating drug costs are also a major concern for the future. During the study period, the
predominant debate was about the ability of Canadian employers to afford escalating benefits costs to cover expensive drugs for conditions such as rheumatoid arthritis and hepatitis C.

“Yes, these drugs cost a lot, and, while our industry is united in the belief that Canadian employers and individual consumers pay unnecessarily high prices, what cannot be denied is the positive impact they can have on employees,” says Willows. “A drug that can cure hepatitis C or move someone with rheumatoid arthritis from a bed back to work is a sound investment for an employer.”

“This study clearly shows that there must be a real discussion about the traditional employee benefits plan,” adds Willows. “We know people like getting their glasses and massages paid for, but demands for expensive but highly effective drugs and chronic health care are increasing rapidly. There must be a real discussion about employee benefits plans and how they are increasingly out of synch with the reality of our health management needs today and into the future.”

For more information:
David Willows, Vice President, Strategic Market Solutions
Green Shield Canada
416.221.7001 ext. 4100