Why are Benefit Costs Rising?

The costs of health care and benefits have been rising each year. This is due to approximately 80% of your benefit costs are influenced by things that are, unfortunately, beyond our control. This benefit inflation trend can be attributed to several factors:

Extended Health Care Trends

Aging Workforce	An aging workforce results in an increase in the utilization of healthcare, especially medications
New Drugs	New and more expensive drugs & therapies replace older, cheaper ones (ie: Imitrex, the first medication specifically formulated for the acute treatment of migraines, has replaced the use of Aspirin/Tylenol as a source of relief). Remicaide and Enbrel are new treatment drugs being used for rheumatoid arthritis at an estimated annual cost of over $17,000 / patient.
Patented Drugs	In 2000, 61%* of all drugs sold were protected by patent legislation (compared to 45%** in 1996). The introduction of federal legislation increasing patent protection for prescription drugs means that more expensive patent drugs are protected for longer periods of time (20 years).
Government Cutbacks	Cutbacks result in a shift of costs to the private sector (and therefore to your benefits plan)
Disease	An increase in the occurrence of disease (cardiovascular, gastrointestinal problems, respiratory illness and specific diseases such as HIV/AIDS) and in the availability of new drugs to treat these conditions (which are covered under your plan) Out Patient Treatment A shift away from in-hospital treatment means drugs now administered in outpatient clinics or home care settings are at the patients expense (and are therefore paid under your plan).

Dental Care Trends

Utilization	More people are visiting dentists today. A survey done by the CDA shows that the number of Canadians who visit the dentist increased from 66% in 1996 to over 75%*** today.
Advances	Due to advances in dentistry, much of the aging workforce has retained their natural dentition. This has increased the need for replacement fillings, scaling and periodontal services.
Fee Guide	Dental plan premium adjustments may also reflect changes made to the provincial fee schedule, published in January of each year.

* Patented Medicine Prices Review Board, Trends in Patented Drug Prices, 2000
**Health Canada, Drug Costs in Canada, 1998
***Canadian Dental Association Journal, 2000

Document published by Empire Financial.