The Benefits Plan Tipping Point: Tackling Spiralling Costs with Business Intelligence

With the Canadian workforce getting older, the baby-boom effect in combination with other factors like increasing drug costs is making it more challenging to provide excellent healthcare benefit plans at a reasonable cost. As an employer, TELUS is a benefit plan sponsor to more than 30,000 employees. Our goal is always to promote employee health and wellness, however after the cost of our benefit plan doubled between 2001 and 2011, we knew we had to rethink what our plan looked like.

We’re not alone. Every plan sponsor is facing spiralling plan costs and needs to answer two fundamental questions: What can we do to contain costs, and how can we be sure the actions we take will have the desired impact?

Historically, plan sponsors have absorbed most of the annual increases. However, nearly 25 percent of employers that participated in our 2013 TELUS Health plan sponsor survey indicated they intend to pass a larger share of costs onto their plan members. This represents a significant shift and I believe we’re now at a tipping point in how we measure and manage our benefit plans.

We engaged our Health Analytics team to conduct a comprehensive assessment of our benefits plan. By applying business intelligence (BI) to our plan data, we were able to clearly see opportunities to make cost-saving improvements that would otherwise have remained hidden.

As a result of the BI analysis, we implemented several cost management programs targeting the areas with the greatest potential for impact. Some of the major changes include mandatory generic drug substitution as well as a $9 cap on pharmacy dispensing fees. You can read more about this in the Living Lab case study.

In the first year, we reduced our spending by nearly 10%. It’s fair to say that without our BI data analysis, we would not have been able to identify these opportunities and our costs would have increased by 1.4%. Today we have a redesigned plan that is exceptionally cost effective – all without negatively affecting our plan members.