I listened to is to you don't have to but should anyway - Obesity: The Science, Impacts and Strategies webcast
In this episode of I listened to it so you don’t have to but should anyway, obesity.
I have been learning about this chronic disease recently, which is a timely learn as we in the benefits industry are navigating new entrants in the obesity pharma space. Recently I listed in on a CPBI session and a very interesting listen from the Maintenance Phase podcast. If you’re not listening to Aubrey Gordon, I highly recommend. There are my notes.
Part 1 – From CPBI. Obesity: The Science, Impacts and Strategies webcast
Obesity is a prevalent, complex, progressive and relapsing chronic disease characterized by abnormal or excessive body fat, that impairs health.
Obesity is classified by the BMI – body mass index
Because BMI does not measure body fat directly, it should not be used as a diagnostic tool. It doesn’t take into consideration different body structure. Instead, BMI should be used as a measure to track weight status in populations and as a screening tool to identify potential weight problems in individuals.
Of note from the CDC, BMI does not distinguish between excess fat, muscle or bone mass. Nor does it provide any indication of the distribution of fat among individuals. Weight loss can lead to overall health improvements, but weight is not the only indicator of health.
Is obesity only the result of not moving enough and waiting too much? NOPE! Genetics, psychological, social economical, environmental, mediations, and social impacts are all contributing factors. It’s a complex interplay of all of these components. In reality when we’re talking about sustained weight loss (assuming that is the goal) we are talking about chronic treatment.
Obesity is associated with multiple complications. It’s likely those living with obesity are also suffering with other conditions like sleep apnea, depression, anxiety, type 2 diabetes, cardiovascular disease and more.
The brain plays a large roll in controlling appetite. Reducing your weight and maintaining the loss is complex as your body will try to adjust to new norms. From a relevant article: “Experts often talk about this idea as a metabolic "set point" that can be hard to adjust. Our genes, environment, and hormones all play a role in body size, and complex physiological factors that are still poorly understood can make it tough for many people to sustain weight loss “
I found this super interesting! There are a few kinds of eating –
There are new guidelines for treating obesity. It’s 700 pages long. I do believe this is the study that they break down in the Maintenance Phase podcast which I strongly recommend you listen so. It’s a great critical thinking piece! But here’s what the diagnosis of obesity looks like according to this document that has been widely adopted around the world:
Health care professionals are encouraged to :
Ultimately the what the root cause of obesity is going to dictate what intervention should be used moving forward.
Challenges I see with this:
A note on weight bias, 40% of adults reported bias and stigma from family, colleagues,
This can increase morbidity and mortality. There is a segment that speaks to medical nutrition. Not to be confused with diet. Diet indicates short term, but medical nutrition is a life long journey. It is meant to set up a person with something that is applicable to their core values and preferences. Plus medical nutrition is culturally sensitive and promotes healthy relationships with foods, ultimately tailoring it to the patients needs.
There is also a chapter on physical activity in the report. Its important for multiple health reasons. But once someone has obesity established, we know that exercise has little impact on weight loss. Physical activity can help with other things like pain management. It’s not about weight loss. Plus, it can be used a possible preventative measure. It should not be used as the only outcomes though.
Putting it all together there is a comprehensive approach in these guidelines. So after addressing the root cause of obesity, lifestyle recommendations are introduced. They can achieve 3-5% of weight loss. But the actual pillars that are the real interventions are behaviours intervention where the patient is meeting with a therapist or engaging with a counselling. There are also pharmacotherapies – there are 4 approved meds in Canada.
Lastly there is surgical intervention which can achieve 30% weight loss.
These interventions are not independent of each other. They can be used in conjunction. It depends on the patients needs and the root cause of obesity.
How does a doctor determine if pharmacotherapies are right for a patent?
Healthcare providers are advised to bring up pharmacotherapies when lifestyle interventions along with tackling the root cause have been ineffective, insufficient or unsustainable.
Now here in lies the problem…. First, how often is the root cause actually being addressed and second, people don’t change their habits. This is a huge book industry on habits for a reason…
Instead it’s easy to prescribe a new drug for life. It is for life becuse once a person stops taking the drug, they are likely to regain the weight. Because obesity is a chronic disease there is evidence that weight rebounding does happen and it most common in the GLP-1 drug categoey (eg Ozempic)
4 approved drug therapies for the treatment of obesity
These should always be taken with lifestyle recommendations.
Pharmacotherapy can help target many of the comorbidities that are often present with obesity where weight loss is helpful such as cardiovascular disease and depression. There are not long-term studies yet. There is some data on people taking the drugs for 1-2 years. But not much past that.
What do I need to know about the national dental program?
The federal budget highlighted the national dental care program again, providing slightly more details on the future of the plan. Let’s break it down.
Currently the national dental care program offers coverage for dental for:
The family income is measured by the income of the total family, not each individual. In Canada the median family income is $90,390. Median is different from average. Median is the middle – it means that half of Canadian families make more than $90,390 and half make less. Using the median income in Canada to qualify for the plan, means half of Canadas will not be allowed to use the national dental care plan. Of the half that are able to use the plan, many will still have to pay to use the coverage. Only those with a family income of less than $70,000 will not have to pay anything for the plan.
What’s being covered? (Effective Dec 1 2022)
$650 per child with income under 70,000
$390 per child with income bt 70,001 and 79,999
$260 per child income 80,000-89,999
Creating a structured list of included and excluded dental services. Right now, it’s a free for all, manual reimbursement.
Health Canada is administering the plan, but a Tender for 3rd party payor is in the market, a corporation will be chosen to facilitate the claim reimbursement to the dental office at time of claim.
Plans to introduce legislation that will compel employers to report existing dental coverage offered to employees through T4/T4A reporting. That seems like it’s going to be a colossal challenge and probably a mess.
Expand the program to people under the age of 18, then seniors and people with a disability, eventually all Canadians.
Should employers make changes to their dental program or remove their dental program?
This is an individual choice, however, this writer does not recommend dropping dental in favour of this plan. Between the extremely low coverage amounts and large number of uncovered Canadians, there is little incentive to drive coverage away from employer paid dental plans and into the government plan.
This plan is designed for low-income families who have no access to care. It’s not designed to replace employer paid dental plans.
We hear a lot about the many generations in the workforce. But just how many are there? And what different ages make up the generations? Let’s take a look at some stats Canada data from the 2021 census so we can better understand who is in the workforce.
Youngest to Oldest we have…
Gen Z: 1997- 2012. I bet a lot of you have one of these folks at home! This generation is aged 11-26. For context, if you followed the traditional high school, university, get a job – you’re getting that job at age 20-22 depending on your post secondary. These folks are very much in the office and in the traditional post school workforce.
Millennials aka GenY: 1981-1996 are middle aged now. The youngest is 27 and the oldest are 42! They are wearing the boss pants and making decisions these days. This population is also the fastest growing (immigration) with 8.6% growth numbers. They also make up the largest share of working age population (15-64). By 2029 they will become the largest generation in the country.
GenX aka the forgotten generation are born between 1966 and 1980 which means they are 43-57.
Baby boomers: 1946-1965 aged 58- 77 most of them are transitioning into retirement and now are less than a quarter of the total population.
I acknowledge that there’s some folks older than 77 in the workforce, but the number is insignificant. There are around Million Canadians aged 77-84. Because the working aged population is defined as 15-64 there is not data on how many of these people are still working. I would venture to estimate that most are working part time and not eligible for benefits anyway.
Some other generational considerations:
It’s International Women’s Day this week. What better time to consider how the employee benefit plan can support women – both at work and as dependents.
Specifically let’s target the drug plan
You have the list. Here’s the why
Fertility Drugs – I’m not explaining this, it’s obvious.
Hormone Therapy – is especially relevant to women in their menopause years. Menopause can be terrible and if you’re a man, I recommend learning more about it so you can better understand what the women in your life may be experiencing and in turn give better advice to your clients. Here’s a great place to start
Birth Control and Other Contraceptives – again this should be obvious but it’s worth mentioning that when you remove the cost barrier from products like these you give women body autonomy. Plus, over the course of 20 years, a women can pay $6000 or more for these products. Just imagine if she could have invested that into her retirement instead.
Weight Loss drugs – a hot topic these days due to Ozempic. I’m including it because even through more men are obese, historically (according to the HBM+ drug report) women account for 81% of weight loss drug users.
Pharmacogenomic Testing – is Pharmacogenomics is the study of how an individual’s genes influence their response to medications. Pharmacogenomic testing can help determine how compatible a patient’s body may be to a particular drug, and helps their physician prescribe the most appropriate medication. The goal is to ensure the right drug is prescribed to deliver the most positive outcome with the fewest side effects. I’ve included this because the majority of women using weight loss drugs also use a drug for anxiety and/or depression. So let’s get them on the right drugs, at the right does out of the gate.
Migraine – Again women are the largest user group of migraine drugs - Insert funny gender joke about why – People with chronic migraine literally get their lives back with these drugs. And employers regain a productive and present employee. It’s win-win.
Last, vaccines – Vaccines the HPV vaccine which protects against cervical cancer is available for women of most ages now and for some reason women are more likely to develop shingles than men.
Workplace Wellness Programs: they feel fun, but aren’t fun for everyone
I recently discovered the Maintenance Phase podcase and listed to the Wellness at Work episode.
I encourage you to listen to the episode to learn about the history of programs and how they are used in the US often to reduce insurance premiums. Honestly it’s a bit wild. I had a visceral reaction to the first minute learning about mandatory daily weigh-ins in front of all of your coworkers. I’m not talking about that here, instead I’ll share what I have learned with a focus on Canada of course.
Workplace wellness is probably one of the broadest terms in the employee benefits space and when an employer claims to have a wellness program it could be as simple as posters in the lunchroom to a complex strategy with goals, objects and an ROI. When you google the definition it’s just as wishy washy “Workplace wellness is essentially any workplace health promotion activity or organizations practice or policy designed to support healthy behaviours in your workplace”.
While well intentioned, I learned that wellness programs are often problematic and even harmful. Let me explain.
First, in a lot of cases, workplace wellness = surveillance. Think about the data being tracked - from your location to your activity and even your routine. Employees end up sharing private information about their life outside of work hours (that’s none of anyone’s business) during many classic wellness challenges.
Second, with fitness challenges like 10,000 steps, you’re asking employees to participate in workplace activity outside of work hours and your activities outside of work now play into they way you are assessed at work. This becomes even more problematic when you consider a huge number of people cannot participate in the challenge due to life responsibilities and that employee may be forced to share this private information they did not want to share with their boss or colleagues. For example, many people will not be able to or want to participate in the challenge for many reasons. Imagine someone working a second job, or someone living with a disability, or someone caring for an aging parent, someone caring for their children, someone in a long distance relationship, someone with a chronic condition. Imagine a colleague casually asking why you’re not participating in the challenge – “come on! It will be fun” they say – forcing the employee to reveal they have XYZ that doesn’t allow them to participate or be judged if they don’t reveal a sufficient “excuse” for not taking part.
Third, in a rewards-based program, selection bias is real. People who are already doing the activities are rewarded for behaviour they already do, and the program doesn’t encourage those who are not to begin these activities and participate.
Fourth, wellness programs may create and emphasize stigma. “Take the stairs when possible” seems innocent enough, but as the podcast says, “the idea that if fat people just took two flights of stairs they wouldn’t be fat is outrageous”. Obesity is after all a complex illness and we are learning not necessarily related to calories in, calories out. This also makes people feel bad for using the elevator and can drive bullying or a culture where people are judging each others health behaviours and how they look.
Bonus – Wellness is often connected to being thin. But there is much more to a healthy body than weight and often one’s weight is not an indicator of their health.
It’s worth mentioning that it does seem like having some form of workplace wellness is worth it for employers. Year over year, the Benefits Canada Healthcare Survey finds that employees who have a wellness program at work are more likely to report their benefit plan as quality that the plan meets their needs. The survey also find that employees who view their benefit plan as quality, are more likely to be satisfied with their job.
What can you do to make your workplace wellness program feel fun AND be fun for everyone?
Updating Some classic employer wellness perks and benefits that employees value:
Primary care is rapidly degrading and for many finding a family doctor is like winning the lottery. Here's a link to an interesting Twitter thread on this topic.
Virtual care is a valuable component to primary care and is helping to fill the gap, but it’s only used for a handful of things. It’s not meant as a replacement for in person care.
Unfortunately Virtual care has taken a beating recently when our most populated province reduced the fee paid for virtual care visits from $37 to $15. This made the care model not financially feasible for some operators and they were forced to close. While some others now charge a subscription fee making the service inaccessible to many Canadians who can’t afford to pay the fees.
I wonder if I’m the long term this will be a net positive as the lower fees will encourage some doctors to return to an in person practice, vs doctors who were taking on extra hours via virtual visits no longer seeing this as a valuable use of time.
It feels like some of the virtual care shine is wearing off. I hope this isn’t the case as it’s an extremely valuable service, and one that I personally use and benefit from.
Or perhaps we are just at the beginning. There are a lot of smart minds in that space. I think there’s more to discover around how virtual care can be used and incorporated into primacy care, especially within the preventive care space.
I hope the primary healthcare evolution will be an innovative and exciting one to watch.
In November the Federal Government announced that they will extend the EI Sickness benefit period to 26 weeks from 15 weeks as of December 18, 2022.
At this point, most, if not all insurance carriers have share an update on this. Some with helpful tools. But mostly the updates are light on advice and but there seems to be a need for more. This is because there’s not a set you have to do ABC. The plan sponsor’s decision to change or not change their disability benefits is unique to each organization and decision makers are looking to their group benefit advisor for, well, advice.
We have two scenarios to consider:
Let’s get the easy one out of the way first. Short Term Disability
Should an employer make changes to their disability plan if there is short term disability being offered – this is either as a stand alone or in conjunction with long term disability.
Right now - no. Hang tight for further information.
Why you ask? What about the EI rate reduction program? The Feds plan to make changes to the EI rate reduction program and further information will be coming at some point in 2023. Right now there is no obligation to update your plan. You will remain EI rate reduction eligible. Employers who change their program now, will likely end up making changes again in the near future.
Before we get into Long Term Disability, first a quick level set is required
I said the EI sickness benefit is first payer twice because it’s an important factor in this decision to change or leave unchanged the LTD. It’s also the reason why the EI rate reduction program exists.
Now that we’ve had an EI refresher, we’re ready to discuss LTD
In most plans, the LTD is a non-taxable benefit where the plan member/employee pays the premium. Working under this assumption, let’s first tackle the big reason why an employer would choose to aligned the LTD waiting period with the EI payout period.
Note 26 weeks is the equivalent of 6 months or 182 days. But, EI has a 7 day waiting or elimination period. So when calculating the LTD waiting period to align with EI this should added, equaling 189 days.
The first reason organizations will consider extending the waiting period is SAVINGS! The rate paid for the LTD plan will (probably) be reduced if you change the waiting period aka elimination period from 112 or 120 to 26 weeks (plus 1 week for the elimination), aka 189 days.
And who doesn’t like to save money?
But how much money are we talking about here? Spoiler alert, not a lot. While I try to be unbiased and neutral here, my opinion is this is not a good reason to change the plan. Let’s look at the math.
Assumptions for this illustration: (don’t be a picky panda, this is just quick math to show you why it’s not a lot of savings)
And now the big assumption, this change will warrant a 10% reduction to our $3.00 rate. I’ve seen quite the spread on the require rate reduction, but 10% is an easy number for an illustration, and I prefer to look at a worse case scenario instead of having rose coloured glasses on.
First $60,000 – what will an individual employee save with a 10% rate reduction?
$3.00 x 10% = $0.30
New LTD rate is $2.70 ($3.00 - $0.30 = $2.70)
$60,000 x .667 / 12 = $3335 of monthly benefit
Cost of LTD at $3.00: 3335 x 3 /100 = $100.05
Cost of LTD at $2.70: 3335 x 2.70 /100 = $90.45
Monthly savings is $9.60 (100.05 – 90.45)
Savings per pay assuming biweekly pay schedule is $4.43
I know that life is expensive these days, and I know people are looking for ways to save money. But this isn’t it. $9.60 per month is not a meaningful amount. Are some people struggling to the point that this amount would help? Yes, I’m sure there are. But overall, $4.43 isn’t going to be noticed on one’s paycheck.
Second $150,000 - what will an individual employee save with a 10% rate reduction?
$3.00 x 10% = $0.30
New LTD rate is $2.70 ($3.00 - $0.30 = $2.70)
$150,000 x .667 / 12 = $8338 of monthly benefit
Cost of LTD at $3.00 8338 x 3 /100 = $250.14
Cost of LTD at $2.70 8338 x 2.70 /100 = $225.13
Monthly savings is $25
Savings per pay assuming biweekly pay schedule is $11.53
In this scenario, the savings are slightly noticeable at $25 per month. But $25 a month still isn’t significant, especially when your individual income is $150,000.
Now that the math is out of the way, what other reasons are there to keep the LTD as is with a 112 or 120 day waiting period:
Last up, let’s make the case to change the LTD waiting period to 182 days.
Besides the small cost savings, there are two significant scenarios to consider:
It is possible that for some group benefit plans, EI offers a higher benefit amount. This will be employers with the bulk of employees at a salary much less than $60,300 (remember we have to take into account the LTD benefit percent is higher than EI and there is no tax owed). OR you have a group where the NEM is low and no one, or mostly no one has applied for excess coverage. Small Businesses – I’m looking at you! LTD NEM’s on groups with less than 10 lives could be as low as $1000 - $1500. $1000 a month, is a lot less than $638 a week. Group Benefit Advisors, this is a great time for proactive communication to plan members to encourage them to apply for their excess coverage. Imagine how defeated an employee, who is struggling with a disability, would feel when they have applied for LTD, they think they have $3000 of coverage, only to find out it’s actually half of that. The good news here is, EI could top up these individuals to the weekly maximum.
If you don’t change the LTD waiting period to align with EI, there will be about 3 months of overlap between EI and LTD. Since LTD is the first payer, the disabled individual will need to let EI know of this source of income when approved. If they do not notify EI, EI will continue to pay the disabled person which will create an overpayment. This overpayment is not a gift from the government. It will need to be paid back with interest when the individual files their taxes or when the government becomes aware of the overpayment. Which ever happens first.
This situation will happen. But I think it will be infrequent for a number of reasons. First when you’re on EI you have access to the portal to update your situation, and you’re generally in contact with them. So there are natural opportunities for updates. Second, the insurance carriers will put protocols in place to help prevent this situation. At Equitable Life for example, their case managers will let employees know that they need to inform EI of their disability payments, plus they will include this info in the letters sent to the employee. I’m sure other insurers are putting similar protocols in place and over time this will become smooth sailing.
This is also an opportunity for the group benefit advisor to help their clients put their own disabled employee communication protocol in place.
What other reasons are you discussing to change or not change?
I love nothing more than a good top ten list and I also love a good drug report. So, I combined the two!
Presenting my top ten takeaways from the 2022 hbm+ Drug Trends and Strategic Insights Report. You can reap my full recap here.
Following drugs trends are important as drugs drive the majority of the claims cost in an employee benefits program.
Download your own copy of the report here
6In this addition of I read it so you don’t have to but probably still should is the hbm+ Drug Trends and Strategic Insights report. You know I love a good drug report and hbm+ shares insights to help guide conversations with employers about their employee benefit plan.
Before I get into my recap here’s my top 3 takeaways for those of you who can’t be bothered to read for 8 minutes. And if you click here, I drop my top 10.
Getting into the recap – I took 71 pages down to 6 pages. You can do it! This data is drug costs adjudicated by hbm+
Year over year growth in drug spend has increased 42.8% since 2017 with total drug costs rising from $1.4B to $2.0B that’s B for billion.
Part of this increase is due to the number of claimants increasing from 1.9M to 2.1M. The rest is due to the number of claims per claimant rising to 14.2 in 2021 from 11.9 in 2017 as well as the cost per claim increasing. However, the cost per claim has only increased by 6.25% since 2017 where it was $64. In 2021 it’s $68. For those who want to do that math 2.3 claims x $4 = and extra $9.2 per person.
Specialty drugs make up 0.64% of claims. Pharmacare provinces like BC, Sask and MB are well below average with ON leading the way in spend here.
As per usual, a small number of claimants make up a disproportionately large share of overall spend.
I think we’ll see this small number increase as more higher cost treatments becomes available for regular conditions. Right now, the top 5% of spenders have an average annual claim cost of $10,538. We could see this creep into the top 8% or 10%. The bottom spenders clock in only $466 of annual spend. We’ll see that number creep as well.
Diabetes, in particular had a different dynamic in the two categories; it represented the second-largest share of drug costs in the top 5% claimant group, compared to the tenth-largest share in the top 1% group. This was due to the high prevalence of the disease, paired with an escalating cost of treatment per patient driven by utilization of newer drugs.
I’m breezing over some of the next data sets as it reinforces the data from TELUS Health and Express Scripts. The share of generic drugs could be higher. There’s room for improvement. The top therapeutic classes are RA/Crohn’s, MS, Diabetes, we’re seeing a huge increase in ADHD drugs (for adults). Mental Health drugs are prevalent and Cancer drugs have new treatments enroute. Due to the pandemic, we saw claims for pain meds and infections drop.
An important topic and something that drug usage can give a client good insight to is employee mental health. The report shows that anxiety/depression prevalence rate by age group in 2021 was over 25% across the board for people aged 25-64. A clear indication that proactively providing mental health resource should be top priority. But not only providing them, but also communicating that they are there, what they are for and how employees and their families can access them. Beyond that, creating a psychologically safe workplace and tackling the root cause of mental health issues is important for employers. Burnout, workloads, culture etc. are all under the microscope.
Specialty drug spend growth slowed down a bit compared to previous years, but it’s not time to be complacent. In a 2021 report by the Patented Medicines Price Review Board (PMPRB), 31 late-stage new medicines were identified based on their potential to significantly impact the Canadian health care system, with some of these medicines potentially offering breakthroughs in treating previously unmet needs or having the potential to treat large patient populations - five new medicines are forecasted to reach annual global revenues over $1 billion by 2027.
Biologic drugs are the main contributors within the specialty drug category accounting for 66% of the cost.
But guess what? There’s a way to reduce spend in this category. Biosimilars. Since 2014, more than 29 biosimilar products have been approved and marketed in Canada. Biosimilars present comparable safety and efficacy to their originator products but at a significantly lower cost with many of these drugs costing a fraction of the original biologic drug.
Biosimilar transitioning policy under provincial health care plans have now been launched in British Columbia, Alberta, New Brunswick, Quebec, Northwest Territories, and Nova Scotia. (Sask just announced) These policies have driven biosimilar adoption but due to the timing of implementation, there are dramatic differences in biosimilar penetration across the country, with a strong west-to-east gradient.
Moving away from specialty drugs, the two fastest growing claimant-cost-interval categories in 2021 were the $1,000–$1,999 and the $5,000–$9,999 intervals. Take notice of the 17.1% growth in the $5000-$9999 category. This claim category can have significant impact on plan experience and long-term plan affordability as is it below most pooling thresholds.
Traditional tools, such as prior authorization, continue to be an essential element of drug plan management, but equally important are disease-based case management approaches. In a case management framework, claimants with specific chronic diseases, such as high cholesterol and diabetes, work with a case manager one-to-one to manage all aspects of their disease, including medication adherence, diet, and exercise among others. Ensuring that drugs in these categories are not used for off label conditions is also an area to focus.
I want to highlight two categories in this spend category – migraines and elevated cholesterol.
Migraines: Due to there being 40% more claimants (taking new biologics like Aimovig, Ajovy, Emgality) total migraine drug cost jumped by 53% These drugs fall into the $5000-$9999 drug cost interval.
Elevated Cholesterol: Total drug cost for elevated cholesterol medications grew by 16.5% due to an increase in Praluent and Repatha. This noticeable growth was mainly thanks to greater claimant utilization, which increased by 17% from the previous year.
While the cost to migraine management is high, the benefit can easily outweigh this cost. Employees who suffer from migraine will get their life back. They will be more productive; they will be less absent.
Total costs for claimants in the $1,000–$1,999 cost interval grew by 19% over the past five years due to consistent double-digit claimant growth. Diabetes is the significant cost driver accounting for 57% of the total drug-cost growth in 2021. This increase can be attributed to the greater expenditures for Ozempic, which rose by 67%
It’s important to note that drugs like Ozempic are sometimes used off label (when a doctor prescribes a medication for use that is not approved by health Canada) for weight loss. Employers wanting to limit off label use for this drug category can use prior authorization as a tool.
Enough of looking into the rear-view mirror! Let’s get into the emerging trends
hbm+ has identified the following emerging trends: digital pharmacy. Diabetes, (I’d call this a continuing trend), Obesity, Cystic Fibrosis, and the Drug Pipeline.
Trend #1 Digital Pharmacy - several new digital pharmacy start-ups entered the Canadian marketplace, including PocketPills, Pillway, Mednow, Health Depot, and others. Digital pharmacies rely on the same model of drug distribution as “mail-order” pharmacies, but they elevate the patient experience to a much higher level, including connections through web and mobile applications combined with home delivery of medications.
The number of claims for non-specialty medications obtained through digital pharmacies grew 55.8% in 2021.
Delving a bit deeper into the dynamics of the traditional versus digital pharmacy models reveals some interesting trends:
Caution rant incoming: I need to add some colour here. The disp fee is not the be all end all to lower costing drugs. The dispensing fee makes up just one of many parts of thee and cost of the drug. Some carriers, namely the blues and Sun life have drug look up tools. Here’s the Pacific Blue Cross tool. These tools will tell you the whole cost of your drug at different pharmacies.
I use a digital pharmacy and my drugs actually cost more through the digital pharmacy than they would if I walked down the street to my local brick and mortar pharmacy. And they cost WAY more if I felt brave or wanted a $1.50 hot dog and went to Costco. But I don’t use the digital pharmacy to save money. I use the digital pharmacy because it’s convenient and it saves me time.
I’m telling you this because there are coinsurance incentives out there that drive plan members to use a digital pharmacy in exchange for a higher reimbursement level. I.e., go to brick and mortar pharmacy drugs reimbursed at 80%, go to digital pharmacy and get reimbursed at 90%. Despite a maybe lower dispensing fee, the additional 10% reimbursed could mean that overall drug claims increase, causing rates to increase more than if that program was no in place. Good drug analysis of the top DINs and discussion around the possibility of claims increasing with a program like this is necessary so employers understand the pros and cons. Digital pharmacy is not a miracle cost saver. End rant.
Back to our program.
It is interesting that digital pharmacies are dispensing a larger quantity compared to brick and mortar. This will over time slightly reduce the number of times a drug is dispensed. It could possibly increase drug adherence, or it could increase wastage. ON has the largest concentration of digital pharmacy uptakes, followed by Quebec and BC.
The report goes on to say that maintenance medications for chronic disease are an ideal category for distribution through digital pharmacies given the predictable nature of dispensing, compared to medications used to treat acute conditions which are often required on short notice.
The top disease states among patients utilizing digital pharmacy are:
Onto Diabetes, trend #2
The number of claimants taking diabetes medication has been on the rise for years. That’s why I flagged this as an ongoing trend, vs an emerging trend. An estimated 141,000 claimants were using at least one diabetes medication in 2021,
Diabetes prevalence rate has increased. Overall health expenditures for claimants with diabetes reached $469 million in 2021 with an average claimant cost of approximately $3,321.
I’m typing that again. With an average claimant cost of $3,321. As an employer, if you can prevent even just one employee from developing type 2 diabetes, it will have a significant impact on your drug claim costs. Plus, the costs saved from all the other stuff connected to a person having diabetes.
The effort put into keeping employees healthy is worth it.
The report goes into detail on the spend in different diabetes drug and treatment classes. I will recap only this: While the mainstay of treatment for diabetes remains metformin, there are a variety of new medication classes that have been introduced in the market over the past 10 years. In particular, the SGLT-2 inhibitors and GLP-1 receptor agonists medication classes have risen dramatically in utilization. These drugs cost significantly more than tried and true metformin.
If anyone is curious about the Diabetes Canada guidelines around drugs, prevention, physical activity etc. you can find it here.
Traditionally patients have relied on test strips to monitor blood glucose, but highly convenient continuous glucose monitoring (CGM) and flash glucose monitoring (FGM) devices have been introduced on the market. They are obviously becoming more popular and do come with a heftier price tag.
The average claimant cost of CGM/FGM devices reached nearly $2,000 in 2021, which was more than six times the average test-strip claimant cost. Younger claimants made up a significant portion of the CGM/FGM diabetes claimants – about 40% of the CGM/FGM claimants were less than 45 years old,
Diabetic patients typically suffer from additional comorbidities. In particular, 47% of diabetic claimants’ total health expenditures were for medications to treat non-diabetic conditions. On average, each claimant spent $1,558 on non-diabetic medications.
The cost of diabetes goes beyond drugs. Outside of the top five EHC services, diabetes medication claimants had much higher levels of spending and much higher prevalence rates than non-diabetes medication claimants on lancets, stockings, optometric diagnostic services, and braces. Greater use of these services is likely due to diabetes-related complications.
Trend #3 Obesity.
Obesity is a chronic disease typically characterized by accumulation of excess body fat which can have a negative impact on overall health and quality of life. There is a very strong genetic component to obesity with an estimated 70-80% of body mass index (BMI) determined by genes. About one in four Canadian adults are obese, with a higher prevalence among males than females.
There is widespread misunderstanding of obesity today, with a common belief that it is purely due to lifestyle factors such as diet and lack of exercise. Unfortunately, this misunderstanding translates into how private drug plans consider obesity treatments, and in particular, anti-obesity drug therapies. Historically, these drug therapies were lumped with smoking cessation and infertility, into a category called “lifestyle drugs.” The underlying philosophical assumption has been that these conditions are due to life decisions made by individuals, and as such, the treatments for those conditions should not be reimbursed through benefit plans.
There exists an opportunity to streamline the coverage of these drug therapies to coincide with today’s more modern understanding of obesity.
From a drug therapy perspective, there are four Health Canada approved treatments: Xenical, Saxenda, Contrave, and Wegovy. Notice that Ozempic is not on this list.
Utilization of obesity medications has escalated substantially in recent years, including a 29% increase in claimants in 2021. The average claimant cost is $1800 and women over age 24 make up 81% of the claimant population. There’s a whole lot you can unpack about the impact of society on women in that stat. We won’t go there today.
Again, a lot of societal impact here that you could unpack. In looking at comorbidities among obesity medication claimants, mental health was the condition with the highest prevalence rate. Nearly 45% of the obesity medication claimants also used mental health medications in 2021.
Trend #4 Cystic fibrosis (CF)
CF is a genetic disease that occurs when a child inherits two defective copies of the gene responsible for CF, one from each parent. It is a multi-system disorder that produces a variety of symptoms including persistent cough with productive thick mucus, frequent chest infections, which may include pneumonia, and bowel disturbances among others. Traditionally, CF was treated mainly with supportive therapies, but over the last decade, a number of drug therapies were approved that treat the underlying cause of the disease,
The larger CF population, combined with the $306,000 annual treatment cost invites questions about the affordability and sustainability of private drug plans in light of this and other ultra-high-cost drug therapies. There were a total of 100 claimants that used these CF treatments in 2021 with the total drug cost of $14 million.
Almost there! Trend #5 the Drug Pipeline.
And that’s the recap.
You can download a copy of the report here
I read it so you don’t have to – Striving for balance, advocating for change – The Deloitte Global 2022 Gen Z and Millennial Survey
I read it so you don’t have to but should anyway– Striving for balance, advocating for change – The Deloitte Global 2022 Gen Z and Millennial Survey
This survey connects with respondents around the globe to gauge their views about work and the world around them. Let’s dig in!
The recap is that people feel burnt out but are still pushing - taking on second jobs and pushing for more meaningful and flexible work. The executive summary is excellent and a really quick read – if you read anything read that.
This year’s survey found that Gen Zs and millennials are deeply worried about the state of the world and are fighting to reconcile their desire for change with the demands and constraints of everyday life. They are struggling with financial anxiety, while trying to invest in environmentally sustainable choices. And they are pushing their employers to be more proactive in the fight against climate change.
The report is broken into 4 categories:
Aligning with Gen Zs’ and millennials’ values is key. Nearly two in five say they have rejected a job or assignment because it did not align with their values. Meanwhile, those who are satisfied with their employers’ societal and environmental impact, and their efforts to create a diverse and inclusive culture, are more likely to want to stay with their employer for more than five years.
90% are making some effort to reduce their own impact on the environment and many are willing to pay more to make sustainable choices. They want businesses, and their own employers, to do more. Only 18% of Gen Zs and 16% of millennials believe their employers are strongly committed to fighting climate change. Gen Zs and millennials want to see employers prioritize visible climate actions that enable employees to get directly involved,
Employers do seem to be making progress when it comes to prioritizing mental health and well-being in the workplace. More than half agree that workplace well-being and mental health has become more of a focus for their employers since the start of the pandemic. However, there are mixed reviews on whether the increased focus is actually having a positive impact.
The cost of living is the top concern among Gen Zs and millennials followed by climate change. After that, top concerns change between the two generations. The younger cohort are concerned by unemployment, mental health, and sexual harassment. Personally, I’m glad to see sexual harassment on the list as is shows a lack of tolerance for historical bad behaviour and makes me hopeful for systematic change in this space. Millennials are concerned about their healthcare and disease prevention. This is a signal to employers, and something that the employee benefit plan can tackle.
With large portions of these generation taking on second jobs and with 47% living paycheck to paycheck it’s not a surprise that burnout is high. 26% and 31% are not confident they will be able to retire with financial comfort. There is an opportunity for employers to make these generations feel more secure by offering a Group RRSP program with contribution matching or a Tax free spending account where they can use the funds to repay student loans.
Respondents also shared that working remotely has helped them save money.
The way things were, is not the way things are.
Loyalty to the employer is waning.
"would like to leave their jobs within 2 years"
Public facing industries are especially at risk for high turnover and industries such as consumer and retail are already experiencing labour shortages. But what can employers do to attract and retain talent?
When people feel their voices are heard, they tend to feel more connected and loyal to their organizations.
You can’t EAP your way out of burnout: 53% of Gen Zs and 51% of Millennials agree that their organization talks more about mental health now, but this has not resulted in any meaningful impact on employees. Only about 1/3 said they would not feel comfortable speaking openly with their direct manager about feeling stressed or anxious or about other mental health challenges
If you’re not addressing the core issues of burnout – work loads, feeling of purpose and feeling valued, no amount of mental health communication will help. When most respondents top source of stress is financial, employers need to do more than offer a few mental health resources. They should assess if their total compensation packages are meaningful
One of the most direct actions organizations can take to address wealth inequality is to focus on supporting their own people. By understanding employees’ priorities, organizations can align benefits and compensation accordingly. Low hanging fruit could be increasing the employer paid portion of the group benefit plan or adding a healthcare spending account.
Another key factor is focusing on closing the pay gap, which will include working to ensure that women and minorities are represented at all levels, and that they have equal opportunities to grow.