Toronto — March 28
ACS/Buck, a Canadian human resource and benefits consulting firms, has released survey findings that indicate continued double-digit cost increases in 2007 for prescription drugs, medical plans and hospital coverage in Canada.

The 2007 ACS/Buck Canadian Health Care Trend Survey, the firm’s seventh-annual study, analyzed responses from 11 insurers, representing about 91 percent of the Canadian group insurance market.

Although the 2007 cost increase for prescription drugs (14.26 percent) dropped slightly from 14.31 percent last year, prescription drug costs still represent the largest portion of employer health care costs.

Future costs might may be affected by Cancer Care Ontario’s recent recommendation to allow hospitals to administer, at the patient’s expense, intravenous (IV) drugs that are not covered by the provincial formulary because of their cost.

“Employers should plan now to address the expected increases over the next five to 10 years,” said Larry Jackson, senior benefit consultant in the ACS/Buck Health and Welfare consulting practice. “For example, plan sponsors should carefully review their coverage commitment to employees and their insurer’s policy, with respect to the payment of claims for IV drugs. This will help ensure employers are not inadvertently paying for new expensive IV drugs that are supposed to be covered by provincial formularies under the Canada Health Act.”

The overall health care trend (including prescription drugs, medical plans, hospital coverage and dental care) increased to 13.33 percent for 2007 from 13.2 percent in 2006.

The cost increase for medical plans alone (excluding prescription drugs) has risen to 13.43 percent for 2007 from 12.52 percent in 2006.

“Our survey results show a stabilization in the rate of total health care cost increases in Canada,” Jackson said. “However, we still expect benefit plan costs to increase at a greater rate than other business costs. Canadian employers need to control this cost of human capital through longer-term wellness strategies and plan design changes in the shorter term.”

Conducted in December 2006, the ACS/Buck Canadian Health Care Trend Survey summarizes the trend factors used by major Canadian group insurers and Blue Cross agencies to project future health care plan costs for 2007.

The survey compares current trends to results for the previous four years. The study provides trend factors by type of coverage: medical plans, hospital, prescription drugs and dental care.

Trend factors for each benefit are segregated into utilization and inflation components (except for dental care).