Study shows cost for health plans are on the rise

In an article from Benefits Canada, a recent survey reveals overall healthcare costs for Canadian employer plans are expected to rise 15% in 2010 which is the highest growth rate in five years.  The rising costs are being attributed to the rising cost of pharmaceuticals which represents about 60% to 70% of health expenditures.   Buck Consultants’ 2010 Canadian Healthcare Trend Survey finds that pharmaceuticals remain the fastest-increasing expense paid by group insurance plans, with an expected increase of 15.8% in 2010. This is up slightly from last year’s increase of 15.6%.

The provincial government is trying to do their part in containing the price of pharmaceuticals by introducing legislation that will reduce generic drug pricing over the next few years.  Despite this effort, it is very difficult to predict future drug costs because of new drugs like the expanding biologic drugs market.

One possible solution

One of the potential solutions is to the broader concept of workplace wellness.  The hope is by encouraging safety, health and wellness, employers not only address the rising cost of benefit plans but also to improve employee engagement and productivity.  Employers are beginning to realize that an investment in a healthy workplace culture will yield significant returns, not just in reduced benefits costs but in improved productivity and employee engagement.

Written by Jim Yih

Jim Yih is a Fee Only Advisor, Best Selling Author, and Financial Speaker on wealth, retirement and personal finance. Currently, Jim specializes in putting Financial Education programs into the workplace. For more information you can follow him on Twitter @JimYih or visit his other websites JimYih.com and Clearpoint Benefit Solutions.

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