GroupNews – October 2019

Eckler’s GroupNews monthly newsletter provides commentary on the issues affecting Canadian group
benefit plans.

In this edition:

• Ontario announces updates to the drug evaluation process for biosimilar products
• Prince Edward Island adds breast cancer drug to formulary
• Ontario amends regulations permitting Registered Nurses to prescribe certain drugs
• Ontario proposes amendments to permit Registered Nurses to initiate psychotherapy
• Report on mental health care needs from Statistics Canada
• Actuaries’ Corner: Canadian Institute of Actuaries: Predictive analytic for disability termination experience

Benefit plan management

Ontario announces updates to the drug evaluation process for biosimilar products

On October 1, 2019, the Ontario Ministry of Health announced updates to the drug evaluation process for biosimilar products.

To improve efficiencies and better align with national processes for the funding consideration of biosimilar products, new biosimilar products and their new indications approved by Health Canada will no longer require a routine review by the Committee to Evaluate Drugs or the Ontario Steering Committee for Cancer Drugs.

Manufacturers will still be required to make complete submissions to the Ontario Public Drug Programs (OPDP) to have biosimilar products considered for listing and funding. If required, the OPDP may continue to seek advice from the province’s expert drug advisory committees.

Impact: Allowing new biosimilar products to bypass the routine review process should reduce the time required to list new drugs.  The Ontario government also claims it will better align with national strategies to improve service and efficiency.

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Benefit plan management

Prince Edward Island adds breast cancer drug to formulary

Prince Edward Island has added Ibrance (a treatment option for metastatic breast cancer that costs $5,300 for each 28-day therapy course) to its provincial formulary. All provinces in Canada now cover this drug on their respective provincial formulary.

Impact: The announcement notes that approximately five people will benefit yearly from coverage of this drug in the province. The impact on plan sponsors with member participation in PEI is expected to be negligible.

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Legal and legislative updates

Ontario amends regulations permitting Registered Nurses to prescribe certain drugs

On October 4, 2019, the Ontario government released proposed amendments to Ontario Regulation 275/94 under the Nursing Act.  The amendments would allow Registered Nurses (RNs) to prescribe individual drugs for certain non-complex conditions and to communicate a diagnosis for the purposes of prescribing.  The amendments are an extension of amendments to the Nursing Act introduced in May 2017.

The proposed amendments include:

• The conditions that RNs must meet to communicate a diagnosis for the purposes of prescribing;
• The drugs and drug categories from which RNs can prescribe;
• Practice expectations and parameters for prescriptions;
• Changes that provide the authority to RNs to dispense and administer medication they are authorized to prescribe; and
• Changes that provide the authority to RNs and Registered Practical Nurses to dispense and administer any medication prescribed by an RN who is authorized to prescribe.

The government is accepting feedback from interested stakeholders on the proposed amendments until November 17, 2019.

Impact: The government anticipates there will be administrative and compliance costs to businesses and professionals as a result of the proposed amendments but cautions that until the amendments are finalized that those costs will remain uncertain.  Increasing the number of drugs that RNs can prescribe could result in reduced wait times and provide for more efficient processes in providing Ontario residents with the drugs they need.

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Legal and legislative updates

Ontario proposes amendments to permit Registered Nurses to initiate psychotherapy

Ontario has introduced proposed amendments to Ontario Regulation 275/94 that would allow Registered Nurses (RNs) and Registered Practical Nurses (RPNs) who meet the conditions of the regulation to independently initiate the controlled act of psychotherapy without an order from a physician or nurse practitioner.

Beginning December 31, 2019, only physicians, nurses, occupational therapists, psychologists, psychotherapists, social workers and social service workers who are authorized by their respective regulatory college will be able to perform the controlled act of psychotherapy.  The proposed amendments will ensure that RNs and RPNs are able to initiate the controlled act of psychotherapy provided they have the knowledge, skill and judgement to safely perform the controlled act, and have determined that the individual’s condition warrants performance of the controlled act of psychotherapy.

The government is accepting feedback from interested stakeholders on the proposed amendments until November 17, 2019.

Impact: The government states that the proposed amendments are not expected to result in any new incremental costs to Ontario businesses. Private plans that cover psychotherapy, however, may see a slight increase in utilization of psychotherapy benefit coverage.

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Research

Report on mental health care needs from Statistics Canada

Statistics Canada recently released new data on mental health care.  The survey of 65,000 Canadians aged 12 and over, provides insight into the different kinds of mental health care received as well as the mental health care individuals believe they need. The survey did not include individuals who are institutionalized.

According to the survey, close to 20 % or 5.3 million Canadians need help with their mental health,  which includes help with alcohol or drug use.  Of those, more than 400,000 were between the ages of 12 and 17 and close to 2 million were between the ages of 18 and 34. Together, these age groups represent almost half of those needing mental health care in Canada.

More than half (56%) or 3 million people reported receiving some form of care and do not believe they need more. However, 2.3 million Canadians reported that their mental health care needs were either not met or only partially met. While the proportion of Canadians who reported unmet or partially met needs was similar in most provinces, there were some differences. In comparison to the national average (43.8%), respondents in New Brunswick and Quebec reported lower instances of unmet or partially met mental health care needs at 35.9% and 38.9% respectively. In Ontario and British Columbia, however, reports of unmet or partially met mental health care needs exceeded the national average at 46.1% and 51.1% respectively.

With respect to the type of care required, respondents reported that the need for medication was the most likely to be met, while 50% of respondents reported that their need for counselling was most likely to be fully unmet.

The survey also offered insight on the barriers to receiving mental health care.  More than three-quarters of respondents (78%) reported personal circumstances, such as not knowing where to get help, work obligations, lack of confidence in the health care system, lack of affordability or insurance coverage, and fear of what others would think, as a barrier to receiving mental health care.

Impact: The survey findings from Statistics Canada suggest that mental health care needs are not being met for millions of Canadians and according, to the findings from the 2018 Sanofi Health Care Survey, a significant number of Canadians (72%) with mental illness report that their condition negatively affects their work performance.  Continued lack of support for mental health issues is likely to exacerbate the impact of mental illness on performance in the workplace and may lead to increased disability claims.

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Actuaries’ Corner

Canadian Institute of Actuaries: Predictive analytic for disability termination experience

The Canadian Institute of Actuaries (CIA) recently completed a predictive analysis study of Long-Term Disability (LTD) termination experience. The mandate of the analysis was to extend the results of the CIA’s 2018 LTD Termination Study (discussed in our April 2019 GroupNews Actuaries’ Corner.)

The 2018 disability termination base tables provide rates that vary by four factors: Age, Gender, Duration of Disability and Region (Quebec versus the rest of Canada).  The objective of this new analysis was to quantify the impact of additional variables that can be used in conjunction with the existing tables to better predict termination experience. The main additional variables considered were Province, Diagnosis, Industry, Monthly Benefit, Pre-LTD Benefits and Elimination Period. Adjustment factors to the base tables were developed to reflect the impact of these additional variables.

Notable conclusions on the practical implications of the additional variables included:

• The Diagnosis and Province variables – if incorporated, there is potential for improved accuracy in termination rates.
• The Industry variable – did not result in material differences between various industries except for “Public Administration.” The adjustment factor for the Public Administration sector generally predicted lower termination rates than all other industries. As such, it is recommended to consider incorporating an industry variable for Public Administration versus All Other. Note that this adjustment factor could potentially increase the premium rates as the termination rate assumption is lower. However, this adjustment is recommended to improve the accuracy of predicting terminations for LTD members, which would result in more appropriate premium levels to keep the plan experience healthy.
• The Pre-LTD Benefits variable – only adds value if the plan sponsors have the same insurance company for short- and long-term disability benefits coverage. The analysis noted that claims reserves could be 25% lower for those claimants who also received short-term disability benefits from the same insurance company, likely due to the insurance company having earlier access to data regarding disability status and thus an earlier opportunity for return-to-work management.
• The Benefit Amount and Elimination Period variables – were found to have minimal improvement in accuracy and were not strongly recommended for practical use.

The CIA noted that valuation actuaries should consider using the models proposed in combination with the recently released disability termination table.  Regardless of the methodology used (i.e., whether using the traditional method or incorporating the predictive analytical technique as an alternative), the resulting table/model should incorporate, at a minimum, Age, Gender, Province, Diagnosis and Industry.

Impact: The adjustment factors for the CIA’s 2018 disability termination table may not have an immediate impact on many plan sponsors’ LTD premium rates, as most large insurance companies develop their own LTD termination tables for pricing and financial reserving purposes.  However, incorporating these adjustment factors to the current termination rate assumption would potentially improve the accuracy of valuing liabilities for post-employment benefits including disability income under self-insured LTD plans or continuation of health and dental benefits for disabled employees.  The potential impact will depend on demographics of individual plan sponsors, including the distribution of their membership by the risk factors. It also suggests that having a streamlined disability process with one provider could lower overall LTD costs significantly.

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