Healthy Debate

I've Moved...

noreply@blogger.com (Marla Schwartz, MBA, CFA) — Wed, 07 Sep 2011 12:51:00 +0000

Don't worry the Debate is still active, I have just moved locations!

You can find me now at: http://benecaid.wordpress.com/

Thank you for your interest and keep the comments and feedback coming!

Generic Drugs and Your Health Plan

noreply@blogger.com (Marla Schwartz, MBA, CFA) — Fri, 26 Aug 2011 13:00:00 +0000

When you go to Costco, do you buy Advil or do you buy the Kirkland version of Advil? At the grocery store do you buy the $7.00 tub of “Greek Yogurt” or the “Presidents Choice” version for $3.99? In our home, we buy the President Choice version because it is as good or better for a noticeably lower price. We like to have both quality and good value when we make a purchase decision.

The same should be true when you buy a prescription drug. But in many cases, it is not happening.

Our company requires all prescriptions to be filled with the generic equivalent drug unless the Doctor specifies “No Substitution”. We do this because in the majority of cases, there will be no difference in the efficacy of the generic drug relative to the name brand. The cost will be markedly different. By using the generic drug, we have saved our clients hundreds of thousands of dollars in the last year alone.

Imagine the impact over five years!

It is important that everyone who is covered by an employee benefit plan understands how the cost of the plan can be impacted by their spending. In the case of generic substitution, the cause and effect is demonstrable. Our objective is to keep our client plans sustainable for the long term.

Our generic fill rate is well above the Canadian average but it is still below the US rate which was 75% in 2010 (Source: IMS Health). Next time you get a prescription from your doctor, ask for the generic equivalent at the pharmacy. You will be amazed at the difference in price.

You will be helping to keep you and your benefit plan healthy for the long run.

Aging...actively: Part 2

noreply@blogger.com (Marla Schwartz, MBA, CFA) — Fri, 19 Aug 2011 13:00:00 +0000

There is no doubt that part of aging and living a full life is to win the Gene Lottery. I am one of those lucky ones. In spite of both of my parents dying young (my Mom was only 40 when she dropped dead from a heart attack), I have won the Gene Lottery. I have no cholesterol, blood pressure or other health issues. There are the usual aches and limitations; my half marathon days are over….but I am not going to go quietly into the night. I am planning on leading an active and engaged life until my last breath. My Aunts and Uncles are wonderful role models. They all work (including Uncle Bill who is now past 80) and travel the world and have a positive outlook on life. My Aunt and Uncle in Montreal gave up their car years ago and walk to work each day.

Joseph Coughlin, Founder of MIT’s Agelab says “We spend billions trying to live longer but no one puts any thought or investment into how to live longer, better”. This is a valid concern as the Boomer population ages and lives longer. By 2030, those over age 65 will double in the US and constitute 20% of the population. According to Statistics Canada, “The number of senior citizens in the country could more than double over the next 20 years.” What is worrisome about this shift in demographics is the decreasing labour pool as boomers retire. “In 1981, there were roughly six persons in the labour force for each retiree. By 2031, it will be less than three to one.” To make our retirement platform sustainable, we either need to introduce more workers through immigration or a higher birthrate, or we need to work longer.

Based on the small sample of my family (6 aunts and uncles over age 65 and all working), working longer is a very good outcome. Work keeps people active, involved and engaged. They are forced to interact with other people regularly and evolve. Uncle Bill was 83 when he first invited me to be his friend on Facebook! He is excited to go to the office and learn new skills. Work sustains people beyond the financial rewards. It is time to rid ourselves of the “retire at 65” mentality and seek to stay engaged and productive regardless of age.

I would love to hear your ideas for aging actively...

Aging…..actively: Part 1

noreply@blogger.com (Marla Schwartz, MBA, CFA) — Fri, 12 Aug 2011 15:59:00 +0000

On a recent trip to the south of France, I was astounded at how active and fit the older set appeared. My husband and I stayed in a beautiful little town built into the side of a mountain. I over packed (as usual) not realizing that you could only drive the car halfway up the mountain. This meant you had to walk and carry your bags the rest of the way. Our friends were staying even higher up in the town. The first time I hiked up to visit them; I thought I was going to pass out. Those hills are steep! The second time I was still panting. By the fifth time up the mountain, I was still breathing heavily, but my body was adapting to the rigor of the climb.

It was disappointing to me that I found it such a challenge. After all, I belong to a gym and regularly spin, do Pilates and walk. I thought I led a healthy active lifestyle……that is until I saw the “old lady”. Now that I am on the other side of “50”, my son calls me old. I however, do not think of myself as old. At least not in comparison to the 80ish year old lady I saw walking up and down the mountain with her faithful dog. This “old” lady was pounding it up the same hill, whereas I had huffed and dragged myself halfway. She had the same routine every day and made it look like a walk in the park.

When we walked around the neighboring town below, we saw many older folks. Always walking, interacting and smiling (some were even holding hands!). Other than the obvious tourists, what I did not see was obese or wheelchair bound elderly people. Very different than when you walk around a North American city.

I am sure the temperate climate is helpful, but it sure looks like these older folks have aging figured out. Stay active, interact with your community, smile and have a dog to keep you company every day when you climb the mountain!

Are Americans smarter than Canadians?

noreply@blogger.com (Marla Schwartz, MBA, CFA) — Fri, 05 Aug 2011 13:00:00 +0000

Health Spending Accounts (HSA) have been available to Canadians since 1986 and they are still the best kept secret. In the US, HSAs first became available to consumers and employers in January 2004. According to a recent survey by Devenir, total HSA deposits rose to $11.7 billion as of June 2011…. Yes, that is BILLIONS of dollars. So are Americans smarter than Canadians?

As a patriotic Canadian, I am not prepared to jump to that conclusion. I think it is fair to say that Americans are more pragmatic and motivated to find effective economic solutions which suit their needs, or they can be on the hook for huge medical bills. Many Canadians and, in some cases, the professionals who advise them are simply not aware of the many benefits of a Health Spending Account.

Our company has been administering Health Spending Accounts for over a decade, and I have observed the peace of mind and satisfaction firsthand with so many clients. I have heard the same phrase over and over again “why didn’t someone tell me about this sooner?” I am certainly trying to tell anyone who will listen, but I am only one voice.

I believe that every Canadian should have the freedom to decide how to spend their healthcare dollars, and they can with a Health Spending Account. You can have choice and still be protected all while remaining ahead of the game financially. You just need the information.

So no, Americans are not smarter than Canadians. They have just embraced a good solution with stealth and enthusiasm. You can too!

What is Consumer Driven Healthcare? Why should you care?

noreply@blogger.com (Marla Schwartz, MBA, CFA) — Fri, 29 Jul 2011 17:16:00 +0000

Last week I wrote about the value of a health benefit plan for employees. Most people who responded to our survey voted that they would not trade their employer paid plan for $10,000 in cash. That implies that people value the “protection” part of their plan, above and beyond it just paying for their routine dental appointments.

Canadians have much to appreciate about our healthcare delivery system. Primary care in a hospital or a doctor’s office is generally covered by a provincial health plan. While you may need to wait to visit a specialist, you will not be presented with a bill at the end of your visit. In the US, the system is very different. Employers can pay upwards of $15,000 per employee for family coverage. Even then, the employee or patient may be faced with a large bill at the end of a hospital stay. That is all changing…

In 2003, the US passed legislation allowing Americans to set money aside in a Health Savings Account (HSA) that is paired with insurance. The insurance was inexpensive relative to what was traditionally being offered and it also had a deductible. The user spends the deposits in the Health Savings Account (HSA) to satisfy the deductible and the insurance portion kicks in if you become very sick.

Coverage in sickness and in health!

Since you are spending your own dollars on health; you are motivated to stay healthy. This is changing behavior. People are spending money to maintain their health. They are also becoming more informed consumers. Comparison shopping and health outcomes are now being scrutinized by consumers; thus the handle Consumer Driven Healthcare. HSAs have been so successful in the US that they are now the fastest growing product in financial services industry; and that growth is continuing! In 2010, growth of these plans amongst firms with >1000 employees was 34%. In Canada, many large employers offer a traditional defined health benefit plan, using the HSA as a sweetener or add-on.

As the positive US experience spills up to Canada, more and more employers will start to offer the Health Spending Account as a standalone benefit plan because employees will request it.

What is a Health Benefit Plan worth to you?

noreply@blogger.com (Marla Schwartz, MBA, CFA) — Fri, 22 Jul 2011 13:00:00 +0000

Many Canadians have health benefit coverage through their employer which covers services such as dental, vision care and prescription drugs. The employer wants a healthy and effective workforce and is therefore willing to provide coverage for their employees. The employees appreciate the coverage in a defined health benefit plan and feel protected and secure knowing that their families are covered.

In fact according to the sanofi-aventis 2011 Healthcare Survey, 65% of Canadian employees think of their health plan as a strong incentive to stay with their current employer. When offered a choice between taking cash or a having a company sponsored benefit plan, 59% said they would choose a benefit plan over $10,000 in cash! So peace of mind is very important to Canadians.

What if you were able to have peace of mind and choice? You can have just that with a Health Spending Account (HSA) coupled with insurance protection. Your HSA pays for routine medical expenses using pre-tax dollars. You also use those same pre-tax dollars to purchase a low-premium insurance add-on. Providing you with the ability to afford many treatments of your choice and decide when you want to receive them.

With a lower premium, you are able to use the funds in your Health Spending Account to pay for the expenses up to the insurance deductible. Instead of having your employer decide how frequently you should be eligible for new eyeglasses or how much you should spend on each massage or chiropractic visit; you decide…..after all, it is your money!

Health Spending Accounts cover a wide-range of qualified medical expenses and can be the most efficient way for you to receive health benefits from your employer.

Protection + Choice = Healthy, Engaged Employees!

Why are health benefits not like insurance?

noreply@blogger.com (Marla Schwartz, MBA, CFA) — Fri, 15 Jul 2011 14:00:00 +0000

Insurance is supposed to be for unpredictable, catastrophic events. The concept is simple: many people pay a small amount for the protection against the “risk” of an event they hope will never happen to them. The cost of the protection is relatively small, so you don’t mind paying. You should never get “value” from this protection as it is intangible. You hope the event doesn’t happen and you never want to make a claim because your protection or premium will go up in price.

We all seem to understand this concept when it comes to our cars. You avoid making claims because your premium will rise and you want to have as high a deductible as you can afford. You know your car insurance won’t cover your regular car maintenance such as an oil change.

You would never insure your house when it is already burning partly because nobody would accept the “risk” even though it is already a known or predictable event. So how come this understanding has never been applied to health benefits? Why would you want to insure teeth cleaning? It is not risky and it is very predictable. If you do pay a premium for this “risk”, I can guarantee that it will be very expensive relative to the cost of the service. Why don’t you have a deductible for your health expenses and have protection or insurance for unexpected and high cost items? That is much more economical and allows you to decide how to spend more of your health dollars. That is what health spending accounts do best!

Why do Canadians believe “healthcare is free”?

noreply@blogger.com (Marla Schwartz, MBA, CFA) — Fri, 08 Jul 2011 19:41:00 +0000

This seems to be a common perception. All Americans and even most Canadians are aware that in the United States the hospital or your doctor sends you a bill after each and every visit. However Canadians have many healthcare services dispensed without having to pay for them on the spot. So the perception is that the service was free. Nothing could be farther from the truth! We are ALL paying for our healthcare. We pay through our taxes (EHT), we pay through our employers who often fund supplemental health benefit plans and we pay out of pocket through our after tax dollars. The problem with the perception of free healthcare is that we consume at will because we have no idea of the value of the services we use. I would never suggest you don’t go to the emergency room to “save your province money “but I would ask you to consider how you consume and why.

Most employer health benefit plans have a defined schedule of benefits. As an employee, you derive value from the plan by making claims without consideration of the cost. After all, you are entitled to the benefits. If you need a chiro visit- you should have it. But if you are buying new glasses which you don’t need simply because your plan offers you new glasses every two years, then you are contributing to the rising cost of your plan. There is a tendency to assume that you lose it if you don’t use it. The more that each plan member uses the plan the higher the premiums will be. Having a more flexible plan will allow employee’s to use the money for the services that their families actually use and allows employers to have more predictable costs. There are choices and options!

Your health benefit plan is considered part of your total compensation by your employer. Wouldn’t you like to have some influence on this important part of your compensation? After all, you are paying for it!

Improving budget certainty in a turbulent market

noreply@blogger.com (Marla Schwartz, MBA, CFA) — Fri, 20 Aug 2010 14:19:00 +0000

The economic climate of the last few years has made employers keenly aware of the need for control and budget certainty. As companies struggle to protect their bottom line, they are taking a closer look at their expenses – and are paying close attention to their health benefits plan.

Companies are starting to question the traditional health benefits model, which typically results in significant increases in plan premiums each year.

The uncertain economy is impacting employees’ perspectives as well. According to The Sanofi-Aventis Healthcare Survey 2010, 77% of respondents agree that the economy has made plan members more aware of the value of their health benefits plan. At the same time, employees are extremely sensitive to changes to their plan - health and dental benefits in particular. With health benefits seen as a significant tool to build retention and attract top talent, employers are challenged to balance cost savings with maintaining an attractive benefits plan.

The concept of a group plan that incorporates a deductible, which functions much like the deductible in a car insurance plan, is resonating with more and more with medium and large-sized employers. The option to limit their direct costs for employees’ expenses to a pre-determined amount (stop-loss level), then pay a lower insurance premium to cover costs above that amount, just makes sense. This would replace the typical fully insured plan where expenses are covered by the insurer from the first dollar of claiming. As a comparison, you wouldn’t pay a premium on the costs of maintaining your car – but you do need insurance to cover any significant or unexpected costs that may arise. By offering health benefits plans that are based on this same concept, employers can not only save money but they can avoid significant premium increases since the insurance portion of their plan is greatly reduced.

Smart business owners recognize that to survive in an uncertain market, they must reduce their exposure to risk in areas that make sense. Selecting the right health benefits plan can help to provide the budget certainty and employee retention they need to weather the storm.

Do you know how much you are wasting?

noreply@blogger.com (Marla Schwartz, MBA, CFA) — Tue, 22 Jun 2010 18:39:00 +0000

In my last post I commented that barely a day ever goes by without news on the rising costs of healthcare. This month, despite the attention being paid to the G20 Summit, has been no exception. On June 13, the Globe and Mail published an article that cited a study from the United States. The study determined that an estimated “30 per cent of more of health-care spending, or perhaps $700-billion a year, is wasted.”

The article made me wonder: How much are we wasting here in Canada? If Canadians knew how much their healthcare services actually cost, would they ask more questions and alter their behavior?

Take the example of my friend’s teenage son, who recently signed up for his first cell self paid phone plan. During the first month, he texted, e-mailed and called friends, and downloaded music and applications to his heart’s content. Then he received a shock; his first detailed monthly billing statement. The true cost of all of this activity – on what he thought was very inclusive plan – came as a complete surprise. Now that he knows the actual costs and coverage of his plan, he has changed his behavior and now consumes services in an educated fashion.

The consumption of emergency health services is not the same as texting on your cellphone; it is not usually discretionary unless it is used as an alternative for a walk in clinic. But many Canadians think of our healthcare as “free” which it is not.

How many times has a practitioner asked you if you are covered by an “insurance plan” before telling you the price of a product or service? It happens to me all the time. The dentist, massage therapist, chiropractor, eye doctor….all ask me that question. It is not wrong to ask the question. It is wrong for the participants in a transaction to make the assumption that if the transaction qualifies for “insurance” that it is “free”. We all pay whether it is through an employer health benefit plan or out of our pocket with after tax dollars. Any claim you make through your employer sponsored health benefit plan counts as part of the “claims experience”; the major driver of premiums! Your benefit plan is there either because your employer wants to help you to stay healthy, they don’t want you to worry about health expenses, or they need to offer this as a competitive part of your overall compensation. As a rational consumer receiving part of your compensation through a health benefit plan you should want to be as careful as possible with your claims and want to eliminate wasteful spending. But the practical reality of how we consume health benefits is very different. Most of us spend more time deciding where to buy our paper towels or gas than we do on expenditures for our health.

The Canadian government spends $129 billion on our health care system each year – that’s about 50% of your tax dollars. Yet, the average person is unaware of how much they consume. According to the Canadian Institute for Health Information (CIHI), in 2007, the latest year of available data, out-of-pocket expenses by individual Canadians represented 15% of total health expenditure, or $23.4 billion. Private insurance accounted for 12%, or $19.5 billion. With more transparency into the true costs of our healthcare services, individual Canadians can play a more effective role in reducing waste and freeing up more tax dollars to go towards improving and expanding delivery of our health care programs and reducing the burden on individuals.

Health costs in retirement - are you ready?

noreply@blogger.com (Marla Schwartz, MBA, CFA) — Tue, 11 May 2010 19:12:00 +0000

As I sat reading the newspaper on Saturday morning, it occurred to me that not a day goes by without a story in the news about the costs of healthcare. Federal or provincial budget impacts, funding for hospitals, costs of drugs, cost of high blood pressure and cholesterol, diabetes and other common health problems….with the amount of awareness being generated by the media, you would think that every Canadian would understand the true costs of healthcare and the challenges that we are now facing to fund the services we need.

Unfortunately, they don’t. This is particularly disturbing when you look at the number of people now approaching retirement and who will be moving off of their employer-sponsored health plans.

According to an RBC poll, in the first year of retirement, approximately 10% of individuals’ annual spending is for healthcare today. The Canadian Institute for Health Information (CIHI) estimates that individuals’ private healthcare spending (costs of services that are not covered by government programs) will increase as we age, at a rate of approximately 5% per year. Apply the power of compounding interest, and it is astonishing how much each of us will need to spend on our healthcare as we get older.

Add it up!

Do you know how much your employer spends on your health benefits? This cost is considered by your employer to be part of your compensation, and is one of the few remaining tax-free benefits your employer can offer. Do you know how much each of your regular visits with your physician or other health care providers (think physiotherapists, massage therapists, eye doctors, chiropractors, dental checkups, and any other service by a licensed professional) cost the Canadian healthcare system? Over time, more of these costs are being transferred to individual Canadians.

To truly understand how much money you will need to fund your healthcare costs in the future, and especially through your retirement years, you need a solid understanding of how much healthcare you are actually consuming.

We have a healthcare system to be proud of – our model is even being adopted by other countries. The down-side is that we have enjoyed such a robust system of government and employer-sponsored healthcare for so long that many of us have the perception that it is “free”. It is not free. As I said in my last post, Canadians need to take more responsibility for their health spending. The better you understand the cost of the healthcare services you use, the more prepared you will be to address the costs as more and more of the financial burden is placed on your shoulders.

Taking Responsibility for Health Care Costs

noreply@blogger.com (Marla Schwartz, MBA, CFA) — Mon, 19 Apr 2010 19:38:00 +0000

The recent battle between Canadian pharmacies and the Ontario government over drug reimbursements brings to light an important issue facing Canadians today. Healthcare costs now account for almost 50% of your tax dollars.

In his article in the Toronto Star entitled "More than meets the eye in pharmacy fight", David Olive pointed out that according to the Canadian Institute for Health Education Canadians spent an average of $897 per person on drugs in 2008, and that this number increased by 16.5% over two years. Mr. Olive also lists several important facts that must be considered in the debate, perhaps the most important of which is his closing statement that it is time that Canadians played their part in reducing the health care burden on our society. He urges us that “it’s time we took more control of our health".

I would like to take this statement a step further. Not only should Canadians be taking more control of their health, they also need to take responsibility for their health spending. Many Canadians are under the misconception that 'someone else' is paying for their health care - be it their employer through an employee benefits plan, or the government through its public programs. Canadians need to wake up to the reality of the situation: in both of these scenarios, it is YOUR money that is being spent.

Employee benefits programs are part of your compensation. Your employer factors the cost of offering the program to you in to the equation when considering your salary. Simply put, the employer is taking a portion of your total compensation and putting in to a health benefits program that they select and manage on your behalf. Government health programs are the same - you pay taxes to the government and they decide how they are to be spent.

An ounce of prevention is worth a pound of cure
So, how can you do as Olive suggests and take more control? Consider new options for your health benefits program that give you better access to preventative healthcare services. Products such as a Health Spending Account are an excellent vehicle for employers to give their employees more control over their healthcare services.

Take a look at your employer’s health benefits program today. Under many “traditional” insurance programs, coverage of preventative healthcare services have been reduced or eliminated to compensate for the rising costs of prescription drug usage. Meanwhile, the employers’ costs for these insurance programs continue to increase, in many cases by double-digit percentages, each year.

With a health spending account, your employer can deposit funds directly into an account that you can use to pay for the expected healthcare services that you need. This includes preventative care such as teeth cleaning, chiropractic and massage services, optometrists and more, limited only by the amount of funds in your account. By using this vehicle to cover your expected health costs, your employer can eliminate these services from the employee benefit package, and instead insure only the unexpected or catastrophic events. With this hybrid solution, you have more control over how you spend the money that your employer contributes to the program, and your employer can offer you more control while still providing protection for the unexpected.

If you are a business owner or are self-employed, you can achieve the same control over your health spending costs, while saving money on your plans by incorporating a Health Spending Account.

As the saying goes, ‘an ounce of protection is worth a pound of cure’. By using healthcare dollars to pay for sufficient maintenance, we can all stay healthier longer, stem the increasing drug costs that we are incurring as a society, and enable the government to spend OUR money on more services.