Employers in Canada have seen temporary relief from rising healthcare costs over the last 3 years. I believe this lulled many into a false sense of confidence that they have learned how to control costs. However; this short-term relief not from cost containment measures but from external industry factors such as prescription drug pricing. Provincial governments have legislated generic drug pricing reforms and a number of brand name drugs had their patents expire creating a flood on new cost saving generics on pharmacy shelves. Now employers need to concern themselves with how to deal with the growing number of high-cost biologic drugs that are coming to market.
50% of employers rate cost containments as "very important" up sharply from 41% in 2009. Benefit costs per employee average 10% of payroll, but when you take into consideration that between 2010 and 2011 costs increased at double the rate of inflation at 6.2% it easy to understand why.
Traditionally employers focus on cost savings of their premiums instead of focusing on reducing the number and cost of claims. Engaging employees through education and wellness initiatives will go along way in reducing future costs.
A 19 yr veteran of the Group Benefit market place sharing my expertise with Business Owners and H.R. professionals!