The Changemakers: Moving the benefits world forward An interview with Stephen Frank (VP at the CLHIA)

January 4, 2016

It’s a new year—time to take a stand on priority issues and really move the benefits world forward in 2016. In terms of taking a stand, who better to look to than the Canadian Life and Health Insurance Association (CLHIA)? Established in 1984 as a voluntary not-for-profit trade association, the CLHIA now has a membership that represents an impressive 99% of the benefits carrier industry. The CLHIA really is the voice of the industry—and since plan sponsors and plan advisors don’t have a unifying organization dedicated to health benefits, the CLHIA is in fact our one and only voice for all things benefits. It’s up to the CLHIA to speak for all of us.

Which brings us to this year’s first ChangeMaker: we had the opportunity to sit down with Stephen Frank who is one of the industry’s “go to” guys as the CLHIA’s vice-president of policy development and health. What we learned is that with the best interests of all of us in mind, Stephen and his organization are taking a stand. Here’s the inside scoop, or should we say, here’s the inside story…

Taking a stand to tacklet our biggest threat

As Stephen explains with no surprise here, the major challenge currently facing the industry—now and for the foreseeable future—is the high cost of new drugs that have entered the market or are on the horizon. Stephen goes on to elaborate that although most plan sponsors recognize the value in offering health benefits, high-cost drugs are the biggest threat to the sustainability of benefit plans. However, because plan sponsors and advisors don’t have a unifying organization dedicated to health benefits, it really is up to the CLHIA to be the one strong voice to represent everyone affected by this threat. So what’s the CLHIA doing about it? Stephen is taking a stand. Here’s how:

Canadian Drug Insurance Pooling Corporation

The entire industry is impacted by the high-cost drug issue, so Stephen’s thinking is that the entire industry should come together to tackle this challenge. This is precisely what the CLHIA did by being the driving force behind the first national voluntary pooling agreement. Called the Canadian Drug Insurance Pooling Corporation (CDIPC), it shares the costs of very expensive and recurring drug treatments. The purpose of the CDIPC is to get plan members the high-cost drug treatments they need while protecting small- to medium-sized fully-insured private drug plans from the full financial impacts of these high-cost drugs. 

Although the CDIPC alone can’t solve the high-cost drug issue, without the CDIPC many plan sponsors would be challenged to provide members access to the prescription drugs they need to treat rare and often life-threatening conditions. In addition, without the CDIPC many small to medium plan sponsors may not be able to survive the financial hit of even a single ongoing claim for an expensive drug treatment.

The CDIPC represents a whole new way for the industry to tackle challenges. It shows that competition and collaboration are possible at the same time. Although each CLHIA member must ensure it remains competitive and must differentiate itself, the industry can also come together. There are things that the industry can accomplish by working together that simply cannot be done in isolation—things that will end up benefiting everyone whether benefits provider, plan sponsor, or plan advisor.

Bulk drug buying

Over the last decade, the benefits world has experienced low rates of growth in drug costs, primarily due to a number of blockbuster drugs coming off patent and the introduction of new generic drugs. However, this unusual situation is now mostly behind us with more and more high-cost drugs continuing to enter the market. Stephen reveals that the CLHIA will be leading the charge to ensure Canadians benefit from the lowest possible prices for these new drugs and to ensure that all Canadians, regardless of location—or whether they are being reimbursed by the public or private purse—pay the same price for the same drugs.

One key focus for the CLHIA going forward will be taking a stand by spearheading collaboration that would enable Canada to leverage its full buying power to negotiate lower drug prices for all. Although it’s clear that bulk purchasing will lead to major savings, Stephen advises that this change can only happen through greater cooperation between the public and private sectors.

In terms of high-cost drugs, the CLHIA will continue to support the CDIPC and will continue to push for a national strategy specifically around very rare orphan drugs. Like with lower-cost drugs, Stephen believes that the key to reforming high-cost drug coverage is collaboration between all stakeholders: governments, pharmaceutical manufacturers, private payers, and patient groups.

National standard for access to rheumatoid arthritis biologic drugs

Earlier in 2015, a great example of collaboration came about because patients and physicians were often confused about reimbursement of rheumatoid arthritis biologics when faced with differing degrees of access depending on their insurance coverage. Stephen describes how the CLHIA represented the industry to work collaboratively with the Canadian Rheumatology Association, the Ontario Rheumatology Association, and rheumatologists across the country.

The outcome was the national standard for access to biologic drugs for adult rheumatoid arthritis patients who are members of private insurance plans. This means that unless a plan sponsor instructs otherwise, private insurers across Canada will adhere to a standard set of criteria for providing access to biologic drugs to treat rheumatoid arthritis in adults—a win for transparency that supports plan members and prescribing physicians.

Taking a stand to shape the future on many fronts

It’s clear that the CLHIA represents an important voice in the battle towards ensuring the sustainability of drug plans in the face of high-cost drugs. However, as Stephen clarifies, although high-cost drugs are by far the industry’s biggest threat, we also need to address other critical issues. If an issue is a concern for the industry and in turn, a concern for plan sponsors and plan advisors, it’s a concern for the CLHIA.

For example, in 2016 the CLHIA will be taking on the issue of fraud prevention. Fraudsters have become increasingly sophisticated, and approaches to the misuse of benefit plans have become increasingly complex. As a result, although traditional anti-fraud strategies are effective, Stephen’s team will be spearheading innovative ways that the industry can work together to keep up with the next generation of perpetrators.

One of the initiatives the CLHIA is helping the industry consider is a way to share claims data in an effort to identify fraud trends that can be hard to identify when each insurer is working independently. Certain suspicious claiming patterns can only be seen via a huge volume of claims data because organized “fraud rings” are now so advanced that they expertly spread their activity amongst multiple carriers. Stephen clarifies that, “No single insurer has access to the kind of claims volume necessary to address fraud at this level. Collaboration across the industry to pool all our claims data together may help the industry get on top of this challenge.”

Industry image is another priority issue for the CLHIA; one that they address on an ongoing basis. As Stephen puts it, “To be effective regarding reputation management, education is essential so that everyone understands why we do what we do.” The public and the media, as well as governments and other stakeholders like paramedical groups, dental associations, and pharmaceutical organizations all need to really understand our industry. This will help build the industry image in good times, while protecting it in bad times. As an example, Stephen highlights a range of educational initiatives the CLHIA has developed to help CLHIA members engage their plan members about financial literacy and mental health. 

Another example of how the CLHIA takes a stand on an ongoing basis is by advocating with provincial and federal governments. This can take many forms: sometimes the CLHIA is proactively bringing issues forward to government on behalf of the industry and other times, it is reacting to issues that government has decided to pursue. And as part of the dialogue, the CLHIA is able to effectively drive change by providing a single united voice for the industry, and by extension, for plan sponsors and advisors.

In fact, Stephen’s philosophy regarding the importance of a two-way street approach and a single united voice applies across all industry stakeholders. Numerous industry groups—like paramedical groups, dental associations, and pharmacy organizations— contact the CLHIA as a single point of access to not only voice their views, but also to hear the industry’s views.

Shaking things up...

Nothing like the new year to spark fresh motivation to make things happen. And from what we’ve learned, the CLHIA will be leading the charge representing all of us with one strong voice to move things forward in the right direction—one that benefits everyone. With Stephen and his team leading the way, we can look forward to a 2016 filled with progress.