Earlier this summer, BenefitsCanada.com posted Brian Lindenberg’s interesting article Do all insurers pay claims the same?—speaking to the results of Mercer’s survey on technology for employee benefits.
I’d like to thank Brian and Mercer for their efforts in this regard. At Green Shield Canada (GSC), we believe that, for years, the health and dental benefits industry has been short-sighted by largely treating the claim administration capabilities of the carriers almost entirely as a commodity and focusing on the administration price as the only real differentiator. So we viewed this survey as a great opportunity for the industry to shine some much-needed light on this issue. And it presented an opportunity for the individual carriers to walk the talk, so to speak.
Along with Brian, we were disappointed that while 13 carriers participated in the survey by answering general questions about the capabilities of their systems, only five consented to participate in the mock adjudication of sample claims that Mercer had developed to test the premise that there are actual differences in the claims administration capabilities within the industry.
We share Brian’s frustration in that the effort by Mercer to quantify carriers’ public claims of superior cost management strategies proved impossible with such reluctance from participants to run the sample claims through their adjudication engines.
We participated in the mock adjudication because we have been noisy on the issue that intelligent systems and fully informed cost management strategies can bring significant cost savings to plan sponsors. And can be done without impacting the integrity of the plan design or the service experience of the plan member.
So, yes, we are disappointed that only four of our competitors would do the same and further our collective learning on the impact of technology and strategy on the cost of a claim.
For GSC, this dialogue goes beyond marketplace rhetoric and competition for clients. It speaks to our collective responsibility to work toward the sustainability of employee benefits programs. All stakeholders have a role—advisors, carriers, plan sponsors and, yes, even plan members.
Our industry has been on a good roll in some respects. The Canadian Drug Insurance Pooling Corporation was born from collaboration that recognized the threat high-cost drugs posed to small and mid-size employers’ benefits programs. The recent policy paper on prescription drugs issued by the Canadian Life and Health Insurance Association expanded on that impulse in recommending systemic change in how Canadians manage and fund prescription drug costs, both publicly and in private plans. That document resulted from carriers coming together and using their collective voice for a broader good—ensuring plan sponsors and their members will have access to the drugs they need in the decades to come.
So how does Brian’s article and Mercer’s survey inform us on the topic of plan sustainability? Well, if advisors do not compel carriers to demonstrate more than simple distribution costs, if expense levels are the only financial factor placed in front of plan sponsors, then those sponsors are not in a position to make fully informed decisions that will impact the sustainability of their plans and the health of their employees over time.
Brian ended his piece on a cautionary note. He asked for carriers to better articulate and demonstrate their value propositions or advisors will be compelled to accept that “…all insurers pay claims the same.”
We think there is a second path.
Carriers insist that investments in systems and innovative cost management strategies make a material difference, and objective data put those differences on the table for advisors and sponsors to examine.
And advisors must demand exactly that. They should also give credit where it’s due: to the carriers that step up—even if it’s only a handful. Five of us sat for Mercer’s examination a few months ago…let’s increase that number over time. And not just for the sake of winning an individual case, but for furthering education and dialogue on the measures needed to keep the plans we help to design and manage sustainable for our mutual clients and their employees into the future.
Steve Bradie is president and CEO of Green Shield Canada. The views expressed are those of the author and not necessarily those of Benefits Canada.