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Survey shows second straight year of declining dental-cost inflation for Canadian employers

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Survey shows second straight year of declining dental-cost inflation for Canadian employers
The overall trend in Canadian health-benefit-plan cost increases showed significant slowing for a second consecutive year. According to a survey recently released by Buck Consultants, a Xerox company, insurers have lowered their expected inflation costs for health benefit premiums from 14.4 percent in 2011 to 11.7 percent in 2012. This overall trend includes prescription drugs, medical expenses, hospital coverage, and dental care.

The 2012 "Canadian Health Care Trend Survey," the firm's 12th annual study, analyzes the health cost trend assumptions that factor into the premium rate setting of nine major Canadian insurers.

The survey shows a downward trend in dental cost inflation across the country (from 8.2 percent last year to 8.0 percent in 2012). Use of dental services — a factor that is sensitive to economic conditions — has gone down, perhaps reflecting increased employee confidence in job retention and availability of benefits.

Insurers have dropped their inflation factors for prescription drugs — the fastest-increasing expense paid by group insurance plans — from 14.2 percent in 2011 to 12.1 percent in 2012, a 15 percent drop.

"This is due to two important factors," said Sandra Pellegrini, leader of Buck's Canadian Health and Productivity consulting practice. "In 2010, several provinces implemented generic drug pricing reforms that reduce their cost. Also, the patents expired for several blockbuster pharmaceuticals (such as the top-selling cholesterol drug Lipitor in 2010, Plavix in 2011, and Crestor, Advair and Symbicort in 2012), opening the door for lower-cost generic substitutes."

"Despite this good news however, it is important to understand the growing impact of extremely high-cost specialty/biologic drugs as a key driver of costs," said Pellegrini. She cited a study by Express Scripts showing that this group of drugs is projected to grow as a percentage of overall drug spend from 19.5 percent in 2011 to between 25 and 30 percent by 2015.

Hospital inflation factors have seen an overall decline in inflation rate since 2008, but this year there has been a slight increase, from 8.2% to 8.4%. "This may represent the impact of an aging population and the related incidence and duration of hospital stays, despite the continuing shift from inpatient to outpatient care," said Pellegrini.

read more on dental-tribune.com




Source: www.dental-tribune.com

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