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Episode 5: An interview with Stephen Frank, president of the CLHIA

Episode 5: And now for something completely indifferent
In episode 5, hosts Sarah Murphy and David Willows welcome to the studio Stephen Frank, President and CEO of the Canadian Life and Health Association (CLHIA).
And now for something completely indifferent

And now for something completely indifferent

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Episode 5 Transcript


[0:00:15.3] SM: Hello and welcome to another episode of GSCs podcast; And Now For Something Completely Indifferent, where we’ll be discussing the hottest topics and trends in Canadian health benefits. I am one of your hosts, Sarah Murphy, and I'd like to just start by saying that we are still very optimistic about this podcast and hope that it will continue to be of interest to our friends in the industry, because although you didn't really asked for it, we’re doing it anyway.

Before we get started with today's episode we would like to remind our faithful listeners that the views expressed in this podcast are those in the individuals speaking and not necessarily the views of GSC. We will sometimes talk about sensitive and possibly controversial subjects, and we therefore reserve the right to potentially offend and are apologizing for it upfront.

You can download this podcast from our website at\podcast or subscribe to it from wherever you get your podcast. We also encourage you to read our publications, the inside story and follow the script, which you can also download from our website, and please be sure to follow the conversation on Twitter and LinkedIn.

Now, let's get started. Today’s episode is once again hosted by David Willows, GSEs chief innovation and marketing officer.

Hello, David.

[0:01:29.9] DW: Hello, Sarah. Thank you for that introduction.

[0:01:33.2] SM: You’ve very welcome.

[0:01:35.0] DW: It sounds a lot like the ones you’ve done in the past.

[0:01:36.9] SM: Yes. There’s a little bit of a script there.

[0:01:40.7] DW: Have lawyers made you read exactly those words? I believe they have.

[0:01:44.7] SM: Possibly.

[0:01:45.6] DW: But you bring great life to it anyways. Today is a very interesting podcast. We have sort of a big deal kahuna.

[0:01:53.0] SM: Yeah. He’s a big deal.

[0:01:54.0] DW: Yeah. We don't want to cast aspersions on our guests in the previous four podcasts, but this might be the most important person we’ve had on the podcast and one that I predicted that if he cared about his career or was thinking clearly, he would refuse.

[0:02:10.4] SM: Yeah. He's one of those ones when he came in the recording studio, it's like I was a little bit star struck, have to say, for the industry.

[0:02:17.9] DW: Okay. Stephen Frank will love to hear that. Yes, our guest is Stephen Frank, president and CEO of the Canadian Life and Health Insurance Association. Put the curtain back on how this podcast works. We’re going to admit right now, we've actually already recorded Stephen, and now we’re doing this intro. Ad as soon as we finished recording Stephen, I think it went pretty well, and people will like it, but you were sort of horror struck, and tell the audience why.

[0:02:42.3] SM: When the interview is happening, the two of you are having just a nice casual chat about all things interesting for the benefits industry. You throw out these acronyms, like everybody listening would understand what they meant. Three in particular that I was a bit horrified that perhaps our listeners might not remember what they stand for, and it was very important that we explain all acronyms as the podcast ensues.

[0:03:06.9] DW: In a GSC podcast, first, we're going to do a glossary of terms —

[0:03:10.3] SM: That’s great.

[0:03:11.8] DW: Before the actual podcast so people are not confused.

[0:03:12.9] SM: This is good. This is clear communications.

[0:03:16.0] DW: You give me the acronym and I’ll do my best to give a definition.

[0:03:21.4] SM: Perfect. The first one that was thrown out was EP3.

[0:03:24.5] DW: We were talking about EP3 in conjunction with a discussion around the industry drug pool, the CDIPC. You want me to define that too. Canadian Drug Insurance Pooling Corporation, and EP3 is the mechanism inside this whole insurance scheme. I’m going to tell you know, there’s not an easy definition of this, but I’m going to try. It stands for extended drug policy protection plan and every insurance company that's part of the pool, this is their sort of first internal pooling component for a fully insured drug plan and each of us had sort of built this on our own and probably most famously plan sponsors that are insured under these plans have a thing called the EP3 certificate that the insurance company creates in a sort of a piece of paper that they can take with them the says, “Yes. We have been pooled and part of the program.” So when Stephen makes reference to that, that's what this.

[0:04:18.4] SM: Excellent. Next up, PMPRB.

[0:04:22.9] DW: Yes. One of my favorite acronyms in Canada; Patented Medicines Prices Review Board. That is an independent quasi-judicial body established by the Federal Government back in the 80s, and essentially it helps regulate — There is a set prices for drugs in Canada. A Lot of talk about reforming this particular board over the last couple of years. A lot of work is happening on that, and Stephen will speak about that.

[0:04:49.3] SM: And the last one is CADTH.

[0:04:51.8] DW: CADTH is the Canadian Agency for Drugs and Technologies and health. They are a great sort of a research body and they put together what they like to call objective evidence for the optimum use of health technologies. Where it comes into our world most clearly is that pharmacy benefit managers, carriers who do their drug reviews to decide where drugs go in their formularies. They will often use CADTH research and declarations about those drugs.

So are you feeling better now?

[0:05:20.8] SM: Much better. Thank you.

[0:05:22.2] DW: Okay. Will you consent to allow the release of the Stephen Frank podcast?

[0:05:26.6] SM: Yes. Let’s let it roll.

[0:05:27.7] DW: Okay. Do it.


[0:05:35.5] DW: Okay. So in the podcast studio today, we’re very lucky to have the president and CEO of the Canadian Life and Health Insurance Association, one Stephen Frank who has been good enough to join us with the promise that we’re going to talk a bit about the year interview of 2017 and what's coming ahead in 2018 for our industry.

Stephen, I think it's probably fair for our listenership to talk a bit about the CLHIA and say what it is exactly.

[0:06:03.3] SF: Right. Well, that’s a good question. We like to be as well-known as we can be, but not many people do know exactly what we do. We’re essentially a trade association. So we represent all the insurers across Canada. We’ve got 67 members of the association and we’re there to represent their interests with government and with other stakeholders, and so that could include talking to provincial governments about healthcare issues. It could be talking to the Federal Government about tax and capital issues and it could be talking to other stakeholders, like some of the other healthcare providers, like the dental profession or pharmacists or massage therapists and chiropractors and how does our industry work with them.

We try to bring the industry's perspective to those issues and, really, our goal is to be as proactive and helpful as we can for all of our members. So that's what gets us up in the mornings.

[0:06:49.8] DW: Okay, great. Now, the association is voluntary, but in the end, basically, like is everybody in it?

[0:06:57.5] SF: We’re very proud to say we have 100% industry participation, and that's not always been true. You can go back over the previous decades and there've been periods where we haven't had everybody in tent, if you want to think of it that way. I think that's the trick of a really strong trade association. You need to be effective. You need to be showing that you can get things done, but you need to be doing it in a way that differing sizes and differing types of institutions still feel their getting value. So we represent some very large multinational companies. We represent some very, very large regional companies. So both of those are important to us and we try to find ways to make sure everybody's getting value out of what we do and that we’re representing their interests fairly.

[0:07:36.9] DW: Okay, fair enough. Now, something we often do with our guests is try to give sort of a bit of personal background. So I going to ask you, how does one become the president and CEO of the CLHIA? I must say you haven’t been there for long. You assume this role, I guess, just sort of last spring, but you’ve certainly been part of the organization before that, but what is your background that led you to working in this area?

[0:07:59.6] SF: Yeah, generally. My personal background is I’m an economist by training, and I've done stints in the government. I’ve worked at the Federal Government, the Department of Finance. I’ve also worked in industry, although more on the banking side than within the insurance industry. For me, personally, my interest has always been sort of public policy, and I've always enjoyed being at the sort of intersection between business and government, and so a trade association environments is perfect for me, a good fit for me.

Like I think with a lot of things in life, it's a little of being in the right place at the right time. It's a little bit of being good at what you do, and so how do —I joined the CLHIA about 8 years ago. Spent the bulk of that time working in that part of the CLHIA that deals with supplemental benefits, and so that will be a lot of our focus today.

When the previous CEO retired in July, there was an opportunity for me to put my name forward, and I was pleased that it worked out. It’s one of those things —

[0:08:53.0] DW: None of us were surprised with your selection.

[0:08:55.1] SF: Thank you.

[0:08:56.6] DW: You’re an Ottawa guy, right?

[0:08:57.5] SF: I was born and raised in Ottawa. I’ve lived here now for 17 years, so I probably can't say I'm a Ottawa guy for much longer. Although I joke with my friends, I will never ever be a Leafs fan.

[0:09:09.5] DW: That was unnecessary to throw out there.

[0:09:10.8] SF: It’s a fair complement for all the Sens fans who are listening. But I made a friend of mine’s daughter take her Leaf’s jersey off when she came into the house the other week and I did it as a joke and she was — It apparently quite upset afterwards, so I had to go apologize that it was just an adult joke. She was too young to get it, but she was scandalized with that. But I'll stand by my Sens forever.

[0:09:32.2] DW: Okay, fair enough. I guess you’re going to get a new arena, which you very badly need.

[0:09:36.0] SF: You bet.

[0:09:37.1] DW: So as promised, we’re going to talk a bit about the year in review, and looking back at 2017, I certainly know a lot of the issues you’ve been working on and you’ve worked on them very collaboratively with all of your members. But what stands out to you as sort of the great challenges of 2017 for your organization?

[0:09:53.8] SF: Well, I think the biggest one continues to be prescription drugs and how we want to provide access to medication in Canada, and there's two — I think of it as sort of two levels of discussion. At one level within the industry, we've got to think about what's the right thing for our customers and what’s the right thing for the system and where do we want to be competitive with each other and where does it make more sense to collaborate and to cooperate? We look at things like what we did with the CDIPC or the Drug Pooling Corporation a couple of years ago was an example where we said, We really shouldn’t be trying to compete on that, and that's not the right interest of our clients.”

We’re always challenging ourselves on that, and as costs and the pressures on the system grow, we’re having more and more of those kind of discussion. Then increasingly, and I think very appropriately, Canadians are saying, “There are people in this country who struggled to get medication they’ve been prescribed, and that's not okay.” In a system where we take pride in finances not being a barrier to access to medication or to healthcare, what do we need to do to improve the system?

So there's a very robust discussion happening now around pharmacare, and you'll hear that term. Pharmacare is a loaded word. It means different things to different people.

[0:11:02.5] DW: Absolutely.

[0:11:03.9] SF: But at its core, what it means is can we make sure everyone in Canada is getting what they’ve been prescribed in a way that's not a burden on them financially or emotionally or otherwise. It's a growing discussion. It's happening provincially. It's happening on pan-Canadian basis, and is also starting to happen federally now too. So we’ve been really trying to make sure we’re part of that discussion and that we can have a voice and an influence, because private plans are extremely important. We provide fantastic coverage and service to those who have it. People who have overwhelmingly appreciate the fact that they’ve got it, and so what we don't want is for change to have unintended consequences where you would see a pullback by employers are a pull back on the availability of private coverage. So you need to do it in a thoughtful way and you need to understand what would be the implications of different models.

We’ve been talking to everyone who will listen to us about that, and I think the trick for us, and we’ll talk a little later about what's coming this year, but the trick for our industry is, I think, to be a little bit even more proactive on what some of those solutions could look like even if it means a bit of change for us. Take some of those hard decisions and do the right thing. If you use that in a quotation mark.

[0:12:14.8] DW: Okay. Let me go back and touch on a couple of things that you just mentioned. So when it comes to the industry drug pool, the Canadian Drug Insurance Pooling Corporation, technical name, in our first podcast we had a dialogue with my colleague Erin Crump who sits on the board at that. I've sat on the board of that organization —

[0:12:33.8] SF: And chaired that organization.

[0:12:34.7] DW: That is true. Yes.

[0:12:35.7] SF: Don’t sell yourself short.

[0:12:37.0] DW: I didn't want to brag. We talked frankly in that podcast about some level of discontent, disappointment in the advisory community about the outcomes associated with striking up this industry pool. You were someone that was there from the very beginning when this is a sort of spark of an idea. What is your take on where we have come with the pool in the four or five years that we've been working on it now?

[0:13:05.6] SF: I’ve sensed the disappointment sort of generally, a general sense that maybe it hasn't met his expectations, and I’ve struggled with a little bit, because we always knew going into this that we weren’t going to solve the problem of rapidly growing drug prices. What we're going to do is democratize the pain, and that's sort of what pooling does.

I guess to really assess whether CDIPC has worked or not, you would sort of need to know what would the world look like today if we had not done. When I look at the number of plans that are pooled, I looked at the number of pooled claims that are growing and I look at the number of employers that are benefiting from the EP3, I don’t think there’s question that have that not been in place, there would be many hundreds, maybe thousands of employers who would be in deep, deep trouble right now struggling with the cost of their plans. That's not the situation they’re in.

Everybody struggling with moderately increasing prices, but no one’s got that catastrophic costing on their shoulders. So that was always the goal. It was to make sure that we keep the system sustainable, but we've got to do other things if we’re going to address the rapidly rising costs. The tide is rising, what can we do to address that? And pooling is never going to solve that problem.

The other observation I've had over the last sort of five or six years is that we probably didn't communicate what about CDIPC is a benefit to the market, and it's really not the pool. It's the EP3. Went out and talked about what was sort of the interesting part, was that the industry was going to start pooling these risks and we’re going to have this new organization, it was going to do that. But that's really — That sort of inside pool, what matters to the listeners and the clients is the fact that we’ve said we will no longer experience [inaudible 0:14:45.8] if you’ve got these high cost claims. When bidding on new pieces of business, we’re not can experience rate [inaudible 0:14:51.6]. It was the EP3 piece that I think should have and we need to continue to explain better that that's the value for people and that's what we’re really doing.

The CDIPC and the pooling is how we as an industry are going to sustain that EP3. So we probably aired on the side of being a little — You’d always want to be transparent, but maybe we are talking a little bit too much about the piping and so that’s what we’re delivering.

[0:15:15.2] DW: Yeah.

[0:15:16.0] SF: So doing it over again, I think, we have been talking about slightly different things in the launch than we did. But I'm quite proud of CDIPC. In my mind, no question, it's added huge value particularly to small employers across the country, and it’s a very important thing. I don't think we want to risk that at all. The alternative would be pretty challenging for a lot of employers.

[0:15:35.6] DW: Okay, fair enough. On your second point there around some of the challenges around high drug costs, high drug pricing, certainly we've been outspoken on that in our health studies in the last couple of years, and I think both in your job and certainly in my job we have a lot of dialogue with the pharma industry and try to find some common ground there, and the people I talked to are eminently reasonable people. They understand our perspective on this and the impact downstream on our clients.

However, I often feel that they are very specific pressures. Often, they work for multinational companies, and Canada is sort of a small part of that company and I'm not sure they're getting a lot of support internationally to look at Canada differently. It's like the price is the price and certainly, like many companies, make as much money as you can. Is it realistic to think we can find common ground with that industry given their pressures and what they are asked to produce in terms of margins?

[0:16:31.4] SF: Sort of the way I think of that issue is that there are some systemic things that we need to get right before you’re going to enter a new partnership with manufacturers. So I don’t think there’s any question that pricing in Canada is relatively high globally. We’re in the top handful of countries.

[0:16:48.3] DW: Yet they dispute that.

[0:16:49.2] SF: They would dispute it, but I mean I've literally never seen a study that shows any other result. So it is what it is. The question for Canada; is that where we want to be, and I don't think it is, and so there's some structural things we need to get right and that means a more effective pricing regulator in this country, which is we can talk a little about that, but that's coming through the Federal Government and the Patented Medicines Prices Review Board. It talks about us getting our act together and starting to leverage our bulk buying ability as an industry and with government to drive those prices down even further.

I think once you’ve got that infrastructure in place, then it becomes more of a discussion amongst equals, if you will where we've got our act together, they’ve got their act together. Now let's talk about access. Now let's talk about making sure the newest drugs come in the market, but doing it on a basis where we’re talking fair pricing for Canadians, not the lowest. I don't think — I would never argue we should be the lowest, say the OECD or anything like that. We’re a wealthy country and can afford more, but we certainly shouldn't be, I don't believe, in the top two or three globally, right?

Will we be partners? We have to be partners with the manufacturers, but there's certainly benefit to them and keeping a very fragmented system with relatively benign regulatory environment, which I think it’s fair to say we’ve the last 70 years, and that is changing extremely quickly.

[0:18:09.9] DW: So what specifically do you see on the horizon from PMPRB?

[0:18:13.1] SF: Yeah. The PMPRB, for the listeners, what they've historically wanted to do is, say, we want to be sort of the middle of the group of seven countries around pricing, and they picked seven countries back in 1987 that at the time were reasonable. The problem is, over the years, because you’re just referencing your price to other high cost countries, we’ve tended to float to the top of the tier. Yeah, we’ve certainly second or third amongst the seven, but those seven are the top seven most expensive on the planet. We've structured the system so it's actually inflated us.

[0:18:45.9] DW: Okay.

[0:18:47.3] SF: What the PMPRB has said is we’re going to change that. We’re going to look at different countries and we’re going to benchmark ourselves against a more representative group, and just that change will start to, overtime, drive prices down. The more ambitious agenda they have, which is going to interesting to see how they execute on it, is that they've said they’re going to start looking at value as well.

Not just saying, “Okay. That the price for drug A is in the middle of these nine countries.” They're going to say, “Is that drug adding value? What's the qualified life year expectancy?” They’re going to actually start getting into a bit of that kind of more sophisticated analysis, like every other country in the world does, and they're going to be looking to partner more closely with CADTH, which is the organization that does that in Canada. So it's taking them in a completely different direction. The prospects from a pair perspective are quite promising, that if they do it well, we should see overtime a meaningful reduction in that sort of ceiling price in Canada.

[0:19:43.3] DW: Will that also though prompt some perhaps more uncomfortable societal discussions? Some of the criteria you’re talking about there where we’ve been used to sort of an open flow and now we have to make maybe different decisions on very high cost molecules.

[0:19:58.9] SF: Well, that's been the pushback on private payers in this debate, has always been, “You guys pay for too much and you don't think about what you're paying for.” My observations is the reason insurers do that is because that's what our clients want. Every insurer in Canada has a managed formulary and we all — Everyone tries to say to employer, “This is the right model and you should be looking at this.”

[0:20:24.5] DW: Hallelujah!

[0:20:24.7] SF: Even three or four years, we were just talking about generic substitution. It’s crazy, right? Canadians and people will always pay a little bit more for their own healthcare. There’s always going to be the willingness in a private environment to pay a little more to have a little bit more, and I think that’s good. We need that in the system.

But to your point, if we’re going to get to an environment where we can say no and we’re going to be able to do better around pricing and we’re going to be able to set prices so that maybe the newest drug doesn't come to Canada because it's not better than what we already have, we’ve got a start having a dialogue with people to help them understand that that does not mean their health outcomes necessarily are going to be impacted. You take that to the extreme and, of course, it does. You have to have access to the newest medications, and you can look at jurisdictions around the world that have gotten that balance wrong and you're starting to see declining cancer survival rates and declining heart attacks, because they’re not getting access to these things.

So it's the balance, and that's what I said earlier, like to me, we want to get the infrastructure in place so the system is there that gives us the tools to have those discussions, and then it's the art of how far do you push on price, how far you push on access, and that's I think an iterative thing that overcoming coming decades we try to make sure we stay on the right line of. But right now we don't even have the tools to have that discussion at system level. I know Green Shield does that for your plan members, and that's great, but you’re one piece of a bigger system and we need some system reform.

I think one of things that I've been so pleased with the CLHA and being able to lead this organization is how willing the insurers are, and I’ll say Green Shield has been a huge leader in this in pushing us to think about what’s the right thing and how do we get there and maybe we take a few hard decisions. I'll reiterate, you guys have been a huge leader, moral and with your behavior on this debate. So, congratulations on that.

[0:22:22.5] DW: Okay. Thank you. We are noisy people. We know that.

Taking this and looking forward a bit, and you and I, we’re talking on our way into this podcast studio, we’re taping this on the morning of Friday, January 26th and we’re 48 hours removed from the provincial conservative leader in Ontario being swiftly exited stage right, and for a lot of us, the first thing we thought about in hearing that news was its impact on pharmacare and knowing that OHIP+ has come in this province in the last number of months and we seem to have a government that, at least, rhetorically has talked about perhaps pushing that even further, and the provincial election coming up in the late spring and what downstream that could mean on pharmacare debates and, obviously, our industry and plan members and stuff. What do you see in 2018 as where your focus will be? I am imagining this topic is not going away.

[0:23:17.3] SF: Yeah, pharmacare is going to continue to be a topic. Like I said at the outset, it's very appropriate that it is. We do need to do better and we need to help those who aren’t getting medications they need get at. The trick is going to be that we do it in a way that doesn't provide incentives or push employers step back, because — And we talked about this a little bit. Employer plans, private plans offer better and faster and broader offers, access to advice and support through case management, all those kind of things, you won’t find that in any government plan across Canada.

So you don't want to lose the good things that we've got, and so our messaging to government has been — 95% of people in this country get everything that they need and they get it easily. 5%, maybe less, don’t. So let's build from what we've got and let's close that gap, and we’re happy to work with them on what that could look like.

I think for our industry, the trick is going to be to come to the table with some substantive recommendations on what that could look like. I think it’s for government to be a little bit careful, a little bit more careful on what they're proposing, because they do run the risk of creating that environment where people are questioning what's coming. They’re going to start to question the value of what they're offering to their employees, and I don't think you don't want to play with, I don't think.

So OHIP+, totally supportive of all HIP+, it’s broadened the access, but on the other hand, it has provided coverage to a lot of people who already had it.

[0:24:49.2] DW: Right. Fair enough.

[0:24:50.8] SF: Maybe if you look at expanding it, we should be focusing where those gaps are, and that's cheaper for the public purse and I think those are the people we really want to be helping.

[0:24:58.4] DW: Okay. Apart from the conversation around pharmaceuticals in Canada, what are some of the other initiatives that are on your team’s docket this year?

[0:25:10.0] SF: Interestingly, one of the issues that’s coming up more and more is this sort of concern around claims fraud within the industry. We’re hearing that across the piece, whether it's around all paramedicals or even on the pharmacy side. When you look and you sort of scan the environment, Canada banks have really invested heavily and have sort of hardened their perimeter around fraud. Auto industry have been pushed to do that aggressively, particularly here in Ontario where fraud had gotten out of control in the auto industry. What happens with fraud is it always goes to the weakest link, and I think it's fair to say the weakest link right now is sort of the health, health and benefits side of the insurance.

We’re hearing from our members that we've got a bit of an issue here that's growing and we need to do something about it. The CLHA has started to do a lot more work in that regard and it’s been really interesting. It's another area where we said to ourselves, “Are we competing on protecting ourselves from fraud or is it more of an industry collaborative thing? What's the right thing for customers?”

Increasingly we’re saying we need to maybe be more collaborative than less, and so we’re looking at creating tools and we started down this road of creating tools, shared databases that companies can refer to when they're investigating suspected clinics. We’re going to push that even further and start looking at potentially sharing of claim data so we can do better analytics around it, putting our best practices around that. So the whole issue of claims fraud and how to get ahead of that, and on top of that is a growing one for the industry and you’ll hear more about that in 2018.

[0:26:44.3] DW: Sure.

[0:26:45.8] SF: The other area that I think we need to do a little bit better is with pharmacy, and I'm sure you’ve maybe had discussions with this on the podcast in the past. I don't know. But pharmacy have — If you think of a stakeholder group that could play a bigger role in provision of care and could be a point of contact. For us, pharmacy feels like a good one. Nobody's cracked that. Not yet though. Lots of pilots that I'm aware of, many of them haven't lived up to their billing. So we have discussions at an industry levels with pharmacy, are there things we can do with you? Is there — When I use infrastructure, are there agreements, like there's some technical claims agreements we have, there’s some piping that we've built with them to help do electronic claims. Is that up to snuff and can we can we transmit things electronically or do we still need paper? If we can't, what do we need to do to fix that? We’re having those discussions. That’s not something your listeners need to be aware of, but there’s a lot of work on the background saying, “Can we get that technical infrastructure in place so that it would even allow us to do some of the value-added services that we all want to do?”

Pharmacy, I talked with dental, the dental profession all the time. They’re actually the second largest cost within health benefits base, almost $8 billion a year on dental. So what does that look like into the future and how sustainable is that? Is the growth sustainable? How do we assess value there?

[0:28:13.4] DW: Are the dentists open for a conversation. Are they pretty cool with the way things are today?

[0:28:16.7] SF: I think there would be — I think their preference would be to sustain the status quo, right? So I think it’s incumbent on us to explain why that’s probably not the right thing the longer term. There’s a bit of adversarialness to this right now, but we've got to get past that and go back to a partnership arrangement. When look for — The pharmacare debate and the prescription drug debate sucks up almost all the oxygen in a room, but there are other pieces that are important too. So we’re trying to make sure we’re not losing track of those and — But yeah, no question, pharmacare will continue to be a driver for us into the new year for sure.

[0:28:51.9] DW: Okay. Just a couple of questions to finish this off here, and we like to sort of keep it real in our conversation. We often talk, you and I, and certainly in broader groups with our competitors about the reputation of our industry. I never assume that insurance companies are going to be the most popular entities in any society, but are there wraps that we get, people's beefs against us that you look across the landscape and say, “You know what? There's some truth in that. Our industry should do better in particular areas.” If so, what are those areas where you think we’ve got to step up a bit?

[0:29:30.8] SF: I guess I would — Maybe come back to the pharmacare piece in a minute. We’ve talked quite a bit about that. But one area that’s been interesting the last 18 months or so is the discussion with our regulators around travel insurance. It’s an illustration of the issue, and for the regulators, their number one complaint about issue is travel. From their perspective, they get hundreds and hundreds of complaints. That means there’s a big problem. When we sit with them, we say, “We pay 95%, I think, 96% of travel claims without asking any questions.” That last 4%, we ask some questions, and of those, the vast majority we ultimately pay, and then there is always that sliver where people misrepresent it on their application or there were reasons they’re not covered, reasonable reasons.

We came on that discussion saying there's no problem. The regulators said, “You know what? There is.” For better or for worse — Where we had to sort of come to terms with the fact is that there's a perception, there's a problem and sometimes that means you’re going to have to take stops. So we did. On my view, we've taken a pretty proactive approach to this. We’ve started standardizing our common disclaimers so that everyone's got the same disclaimer and the same clear language on their policies. We’ve standardize our common definitions around medical criteria. We've put in standardized presentations to customers so that everyone is seeing the same things.

As an industry we said, “Every company feels they’re communicating the information, but we’re all doing it slightly differently.” So if you are a customer and you’re comparing three, it can get a little confusing. Even though all the information is all there, it doesn't look the same. Maybe the words are slightly different.

Again, are we going to compete on the definition of a heart attack or pre-existing condition or things like that? The answer was no, we shouldn’t be. It should be around the service, the price and the features on that. 18 months of work has gone into trying to find ways to be more proactive, but at the end of the day, we will always still always, and we’ve said this to regulators and everyone else, “There will be cases where we’re going to say no.” and that's the challenge for insurers. You can do it right 95% of the time. That last 5% is still large number of people and it can create a bad impression. So we've talked to the CLHIA at our board a number of times on whether we should be at an industry level doing something to address the reputation, and I think the feeling is that the way you address reputation is through your behavior, and that's really on the companies.

So companies like Green Shield, you need to be challenging yourselves, “Are we doing the right thing always and can we justify what we've done and would we be comfortable with that?” I think when I talk to the CEOs around the industry, they all feel they’re pretty well-positioned, but can we do better and can I be helpful in communicating more? I think we can on the margin.

[0:32:18.3] DW: We definitely have those conversations, especially around the executive table about stepping back and saying like, “Does this feel right?”

[0:32:26.3] SF: Someone described it as the “ick” factor, you push it and then — There's not a blocked line on these things, but at some point everyone around the table goes, “Eww! Oh, that didn’t feel right.” You got to listen to that part of your psyche and stay back a little bit if you’re crossing that line.

[0:32:42.3] DW: Conversely, is there an area that we get a lot of bad rap about that you think is pretty fundamentally unfair that we are actually better at something that maybe people give us credit for?

[0:32:51.8] SF: I think the bad rap is the misunderstanding of the insurers and what we are doing, versus what our clients want us to do. There's a perception out there that insurers are creating a system because that's what we want, and it's a very competitive market. There’re 24 insurers competing in the health and benefits space in this country. It’s the customer that drives what this system looks like.

So I get a lot of questioning and criticism while the insurers are doing this, the insurers are doing that. I’m like, “No. We’re doing that because that's what our customers want.” We are not going to go out and dictate to people what they get. That’s not how it works and that's not appropriate. So that's one area where a little more understanding of the dynamic and that we’re a key influencer and we can certainly influence these things. But at the end of the day, people have certain expectations of what they want and we’re here to help them get that in a responsible ways as we can. So things like we talked earlier around why do pay for so many drugs. Why do you pay for dental procedures maybe that aren’t clinically — Whatever. You can get these sort of technical criticisms of the industry and at the end of the day, we agree with some of that, but if customers still say, “I'm more comfortable sleeping at night knowing I’ve got access to everything. I'm prepared to pay for that's.” Then that’s a very fair place to land.

As long as we’re bringing all the information to the table and explaining them the implications of that and we’re doing the right thing in those discussions, then I think the market lands where it lands. There's a fundamental misunderstanding of that within a lot of those sort of people that criticize the industry and we’ll need to get a little better at explaining that over time.

[0:34:33.6] DW: Okay. Yes, and I agree with that wholeheartedly. Stephen, it’s been a great honor to have you in the podcast studio sharing your perspective on the challenges we all face. I'm sure this is going to be a very interesting podcast for all our listeners to hear, sort of the bit of the insider perspective on someone that works on Ottawa and works in the provincial capitals and has to sort of put up the good fight for our industry and, in the end, also for the clients that we all serve. I hope this isn’t the last time. We'd love to have you back maybe exactly one year from now to look at how 2018 went.

[0:35:11.1] SF: I would love to do that. That’d be a great thing. Thanks a bunch.

[0:35:13.2] DW: Thank you.


[0:35:21.9] SM: Thank you to our listeners for tuning in to another episode of And Now For Something Completely Indifferent, a Canadian health benefits podcast. To be sure to get feature episodes, assuming we continue to do this, please subscribe to this podcast wherever you get your podcasts or visit our website\podcast to download.

As a reminder, we talk about these issues consistently in our publication, which are available on our website. Specifically for today's episode, you can check out our February 2018 issue of the inside story.

Thanks for listening, and we’ll talk again soon.