Brian Lindenberg

Originally published in Benefits Canada

History has taught us that health policy decisions are not only emotional, but very political. Changes to public policy are frequently made in response to the concerns raised by any number of constituents and “special interest groups”, and governments are disinclined to take bold steps to reform the health system, as the measure of ‘bold’ is often decided by popularity polls.

Take the U.S. as an example of the politics of health. Many experts have labeled U.S. healthcare reform a convoluted and complex piece of legislation that really does little to fix the significant issues facing the American health system. Yes, the legislation does provide access to healthcare for many uninsured Americans, but it does relatively little to address the spiraling cost of healthcare. How did the US get to this point? In a word, politics. Opponents to healthcare reform made it very difficult for the President to pass the extensive healthcare reform package that he wanted.

The Canadian experience

Closer to home, the Alberta government developed a comprehensive pharmaceutical strategy to address the rising cost of prescription drugs and to introduce an expanded role for pharmacists in the delivery of healthcare. An important pillar of this strategy was to revise Alberta’s seniors’ drug plan through the introduction of premiums, revised co-payments and to make the provincial program second payer to any plan provided by an employer.

Seniors’ groups in the province were outraged and the government has recently announced these changes will be delayed indefinitely to allow time for further review. It may be entirely coincidental that the government decided to defer these changes at a time when their popularity with the voters is relatively low, but the optics would suggest otherwise. The politics of health undoubtedly had a significant role in the government’s decision.

The Ontario government seems more willing to take on pharmacy in a very public battle to reduce the cost of prescription drugs in that province through an aggressive generic drug pricing strategy. Pharmacy has rallied and launched an impressive public relations campaign to win the hearts and minds of Ontario voters. The government relented—albeit briefly—and delayed its announcement to allow it more time to consider pharmacy’s submissions. In this case, however, it managed to push its reforms through.

None of this is particularly new, as healthcare decisions have always been political. But the stakes are higher now, and the need for healthcare reform will increase exponentially in future years. The shoe has to drop, and soon.

Finding a voice

Employers have a big stake in the politics, but corporations don’t have a vote. They need a voice, not unlike the special interest groups that influence policy. There have been some examples of employers organizing around health issues such as the Employer Committee of Alberta and Ontario and both groups have enjoyed some success. However, the issue is time, and staying in front of governments takes a lot of it.

There are several things employers should be doing today in anticipation of the shifts governments are expected to make:

Get in the political game

Governments react to public pressure. Employers need to form an opinion on healthcare reform and they need to invest the time and money to make their views known to provincial and federal politicians. The alternative is to simply react to the changes.

Immunize your benefits plan

There are steps that you can take to immunize your benefits plan from the impacts of government downloading of costs. Most plans are positioned to wrap around government programs – you can reserve the right to not automatically pick up costs shifted from the government (although in reality many employers still do). You can limit your costs through plan maximums or by employing more defined contribution type plans such as health spending accounts.

Control the distribution channel

If you control the distribution channel, you have more control over how these costs change. For example, if you negotiate a pharmacy preferred provider network, you have some influence over how government policy decisions in this space are implemented and impact on your benefit plan.

Transfer responsibility

Employee benefits are important in the war for talent so it is not likely or practical that employers will want to get out of the game completely. However, a portion of the benefit promise may be satisfied through the individual/voluntary benefits market. Dealing with the consequences of healthcare reform can then be a shared responsibility between the individual and the insurer.

Change your mindset

Most employers view benefits as a cost rather than an investment in the health of employees and their families. There is growing evidence linking healthy employees to productive employees to better products, satisfied customers and ultimately higher profits and shareholder returns. By any measure, keeping people healthy and productive is a good investment and even if the cost doubles or triples, the return on investment is very good. Healthcare decisions made for political reasons lead to imperfect decisions, the consequences of which employers will need to navigate. The fiscal challenges of healthcare are real and more costs will be downloaded to the private sector in a way (and at a time) over which employers will have very little influence. That is unless—of course, employers participate in the debate.

React to changes as the government makes them, or be proactive is shaping the future of healthcare in Canada – it is your choice.

Brian Lindenberg is a Worldwide Partner with Mercer in Calgary.

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