English forum oct 2003

September 2007
What’s
Annual Notes on Provincial Health
Care Changes
Annual Notes on
Provincial Health
Health care security is extremely important to Canadians. Changes in provincial health Care Changes
care coverage affect the lives of Canadians and, potentially, employer benefit plans. British Columbia
Consistent with the September Forums of the past number of years, this issue of Forum Alberta
Saskatchewan
focuses on significant and practical changes in the Canadian health care system that have Manitoba
Ontario
Quebec
British Columbia
New Brunswick
On July 3, 2007, the Ministry of Health announced that patients who experience severe Nova Scotia
Prince Edward Island
breathing conditions such as chronic bronchitis and emphysema will benefit from Newfoundland and
PharmaCare coverage for the medication tiotropium, also known as Spiriva. PharmaCare Labrador
estimates that initially 6,000 patients may receive coverage for tiotropium at a total cost Yukon
Continued
Improvements
On May 29, 2007, the Health Minister launched the Primary Health Care Charter Insert
which outlines a new vision for primary care in British Columbia. The Charter sets the Investment
direction and establishes seven health priorities that are supported by a number of high- Consulting Insights
impact projects to transform the primary health care system in BC. The seven priorities Implementation
of Portable Alpha
Strategies
• improved access to primary health care; Aon Survey on the
• increased access to primary maternity care; Performance of
Institutional Pooled
• increased chronic disease prevention; • enhanced management of chronic diseases;• improved coordination and management of co-morbidities;• improved care for the frail elderly; and• enhanced end-of-life care.
All of the priorities are supported by projects that have common themes of assisting physicians in redesigning their practices to improve care and see more patients, building networks of interdisciplinary care for individuals living with chronic Aon Consulting • Forum • September 2007 conditions, as well as working with patients as and part of the 10-year immunization strategy to partners, and not merely passive recipients of care.
minimize the risk of vaccine-preventable diseases. The strategic directions outlined in the strategy In May 2007, the Ministry of Employment and Income Assistance announced that the province had provided the Alliance for Equality of Blind Canadians with a $355,000 one-time grant to help visually impaired British Columbians cover the cost of moderate, low-technology visual aids. • strengthen parental education and counselling; The program started mid-July. To be eligible, people must be residents of BC, over 18 years of • strengthen provider training and education; age, and have severe vision loss that eyeglasses • strengthen public education and awareness; and • strengthen research and evaluation.
Alberta
New regulations under the Health Professions
Saskatchewan
Act which allow pharmacists to prescribe drugs As of July 1, 2007, a new Seniors’ Drug Plan for came into effect on April 1, 2007. As a result, Saskatchewan residents 65 years of age and older pharmacists will soon be able to prescribe some came into effect. It ensures that seniors will pay drug treatments, continue prescriptions made no more than $15 per prescription for drugs in by other health practitioners, and administer the Saskatchewan Formulary. Seniors are now injectable drug treatments, such as vaccines. automatically covered under the Seniors’ Drug Pharmacists who wish to be able to prescribe Plan the month they turn age 65; no application medications will have to complete appropriate is required. Low-income seniors receiving the training approved by the Alberta College of Guaranteed Income Supplement, Saskatchewan Pharmacists. Upon completion, pharmacists Income Plan or Special Support coverage who will be able to prescribe for conditions within were paying less than $15 per prescription prior limits that will be established by the College. to July 1, 2007 will continue to do so. Patients This will help to ensure that pharmacists will with palliative care coverage and those covered by only prescribe for those conditions that they are certain Saskatchewan Aids to Independent Living competent to assess. Although the regulations programs continue to receive Saskatchewan came into force April 1, 2007, training is expected to take some time and will begin in Saskatchewan children with diabetes have access to free insulin pumps as of July 1, 2007. In February 2007, Alberta Health and Wellness Saskatchewan Health provides insulin pumps and the necessary supplies to diabetic children who distribute $8 million to the province’s nine health require these devices to adequately stabilize their regions over two years from a new Innovation blood sugar levels. Under the children’s insulin in Immunization Fund in an effort to increase pump program, eligible children 17 years of age immunization rates. The new fund is a method of and under who meet program criteria receive increasing accessibility to immunization services insulin pumps and insulin pump supplies.
Aon Consulting • Forum • September 2007 Manitoba
The Transparent Drug System for Patients Act, 2006 (Bill 102) came into force in stages, specifically on October 1, 2006 and April 1, 2007. Of particular gives Manitobans the option of paying their importance to plan sponsors is the allowance of Pharmacare deductible in monthly instalments. Off Formulary Interchangeability (OFI) that was The instalment program is intended to help implemented on April 1st of this year. Previously, persons with high drug costs by reducing a generic drug was required to be listed on the financial hardships caused by high lump-sum Ontario Drug Benefit formulary prior to it drug costs. To be eligible for the Manitoba being designated as interchangeable, and hence, deductible instalment program, an individual substituted in place of a more expensive brand equivalent. This change is expected to result in increased savings for plan sponsors.
• be enrolled with the Manitoba Pharmacare Another change to the drug system resulting • have eligible Manitoba Pharmacare drug costs from this legislation reflects the public plan’s over a 30-day period that are equal to or above intention to reimburse pharmacists for professional services. These cognitive services encompass • have reached or exceeded their benefit limit disease/medication management and counselling, for drug coverage they receive through another and demonstrate the province’s commitment to recognizing the important role pharmacists play • pre-authorize withdrawals from their bank in primary care. On July 17, 2007, the Ontario account by Manitoba Hydro for the cost of the deductible instalment and their hydro bill.
program. Under this program, people who are being treated with three or more drugs for chronic The Manitoba Pharmacare Program covers 100% conditions are allowed to consult with their of drug costs once the income-based deductible pharmacist for up to 30 minutes once per year to review the medications they are taking. The program is free of charge to all Ontarians, not just Ontario Drug Benefit Program recipients. As this On August 2, 2007, the Ministry of Health and is a government-sponsored benefit, the associated costs will not be passed through to private Papilloma Virus (HPV) Immunization Program. Beginning in the fall, the three-dose HPV vaccine will be offered to about 84,000 young women in Grade eight. HPV is a common sexually transmitted virus and causes cervical cancer Due to the adoption of Bill 130, revisions have been and genital warts. The school-based vaccination made to the Act respecting prescription drug insurance program will be administered by public health that clarify the fact that individuals covered by nurses. The vaccination will be voluntary. The a private group benefits plan must provide drug initiative represents an investment of $117 million insurance for their children and spouse, unless they over three years. The funding is being provided are already covered under another plan. In addition, through a recent federal budget initiative. effective as of January 1, 2007, employers who Aon Consulting • Forum • September 2007 sponsor prescription drug coverage under would be investing up to $4.2 million to such coverage from an eligible employee’s purchase and deliver publicly-funded flu remuneration, unless the employee provides vaccines to infants, seniors and others at high risk of complications from influenza. Nova Scotia
Insurance Plan increased as indicated in On & After
Increase
July , 2007
July , 2007
premium increased by 6%, or an additional $24, bringing the annual cost to $424 Monthly Deductible
from $400. Seniors are required to pay a Monthly Co-insurance
co-payment of 33% for each prescription to a maximum of $30 per prescription, up Maximum Monthly
Contribution*
Maximum Annual
annual cap was increased by 6%, or $22, to * Different calculations are used for persons age 65 and over Since April 1, 2007, patients who rely on who are in receipt of the Guaranteed Income Supplement.
** Individuals age 65 and over who are in receipt of the maximum Guaranteed Income Supplement do not pay the Specifically, such patients now have access to a monthly supply of portable oxygen. New Brunswick
and Wellness announced that the publicly active daily living. Eligible home oxygen be expanded this year to Grade 12 students clients are provided with up to 10 tanks part or all of the cost of the 10 tanks of the client’s need, income and family size. health care workers will be for one year, and will target those born in 1970 or later became available to Nova Scotians facing an incurable illness. An increase in the Aon Consulting • Forum • September 2007 allow palliative care patients to remain serious illnesses. It began to be offered to all Grade 9 students across the province in of home-care services per month, for a total of 600 hours in the last three months Newfoundland and Labrador
entitlement will allow patients to access signed a four-year agreement to give both parties a simplified structure with fair and support, and respite support for families. reasonable reimbursement, and clear policies There are no fees for enhanced palliative receive a professional fee (where applicable, based on the program component) of contraceptives, and a 33 1/3% mark up for diabetes supplies and insulin. Under the pharmacists will receive a professional fee drugs, oral contraceptives, and diabetes 2008 to March 2011, the professional fee suffering from chronic pain receive equal access to quality, evidence-informed care. It also aims to ensure that all In April 2007, major enhancements to the health professionals receive appropriate to make drugs more affordable for residents encompasses five key areas, specifically, self management, primary care education, secondary services, and tertiary services.
whose drug costs are consuming an unreasonable share of their income. Prince Edward Island
individual families will have their annual family income. Those with net incomes up to, but not including, $40,000 will pay a maximum of 5% of their net income; those authorization for coverage of the Alzheimer’s with net incomes of $40,000 to under $75,000 earning $75,000 to under $150,000 will pay a maximum of 10%. The government will pay As of January 2007, Health and Social Services announced that the chickenpox vaccine will be The government’s Low Income Drug Program available for all Yukon infants when they reach (LIDP) provides drug coverage for families with children with annual household incomes up to $30,000, to couples earning up to Continued Improvements
$21,000, and to singles earning up to $19,000 Again this year, each province and territory has reported improvements in health care delivery ranging from 20% to 70% of total drug costs.
and access. Updates from the various ministries of health report measurable reductions in persons receiving benefits under either the health care wait times, improvements in access LIDP or the Senior Citizen’s Drug Subsidy to health care, and concerted efforts to increase Program whose co-payment amount for their the number of doctors and nurses. These results drugs exceeds 5% of their income will receive indicate that health care security is being taken further benefits than is currently the case.
seriously in all Canadian jurisdictions.
About Forum
This issue of Forum was published by Aon Consulting, a member of Aon Consulting Worldwide.
For information about Forum:
National Research Department, Aon Consulting Inc. • 145 Wellington Street West • Suite 500 • Toronto, Ontario • M5J 1H8 E-mail: [email protected] Service national de recherche, Groupe-conseil Aon • 700 De La Gauchetière Street West • Suite 1900 • Montreal, Quebec • H3B 0A7 E-mail: [email protected] For information about Aon Consulting: 1.877.292.2714 or http://www.aon.ca Our Offices in Canada
British Columbia
Manitoba
Saskatchewan
Nova Scotia
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Aon Consulting • Forum • September 2007 I n s i g h t s I n t o R e s u l t s - o r i e n t e d H u m a n R e s o u r c e s S o l u t i o n s Investment Consulting Insights
Aon Consulting
Implementation of Portable Alpha Strategies
A basic introduction to portable alpha strategies was Possible Alpha Sources:
Possible Beta Sources:
provided in the September 2006 Forum. This year, the implementation of these strategies is explored.
What is a “Portable Alpha” Strategy?
The traditional portable alpha strategy consists of two parts: a) Assets are allocated to an index investment, either directly or through the use of derivatives. The return on the index investment is referred to as “beta.” b) Investment in an “alpha” source, which represents the excess return earned by a manager over an index. For example, a long position in an actively managed fund and a short position in the index underlying the Pension plans implement portable alpha strategies in Implementation Considerations
order to separate asset mix decisions from the selection of When performing due diligence on portable alpha funds, plan sponsors should pay attention to the following issues: Implementation Issues
• the selection of the beta and alpha sources, since these products vary significantly in risk and return expectations; In order to “port” alpha from one asset class or manager • the manager’s track record of implementing these strategies to another, a pension plan has to make use of complex derivatives contracts (e.g., swaps or futures). Use of these • the correlation of the product with existing managers and contracts requires time-consuming and costly legal reviews, ongoing cash flow management and rebalancing, and • the currency risk and currency hedging strategies within counterparty credit risk analyses. Therefore, for all but the very largest Canadian pension plans, direct implementation • the risk management built into the investment process; of portable alpha strategies is not practical.
• the reliability and consistency of alpha sources: diversified A growing number of fund managers are introducing packaged portable alpha solutions. These products are more expensive and less flexible than direct • the fees (e.g., hedge fund products have high fees and implementation, but simplify pension fund accounting, liquidity, and performance measurement, and limit Portable alpha strategies are becoming increasingly popular the plan sponsor’s liability to the value of the initial with pension plans. However, plan sponsors should pay investment. Common packaged products include the particular attention to the implementation issues before deciding to invest in these strategies.
Aon Consulting • Investment Consulting Insights • September 2007 Aon Survey on the Performance of Institutional Pooled Funds We are pleased to present the results of the by over 100 Canadian pension fund managers. Aon quarterly survey on the performance of The following table illustrates the performance institutional pooled funds. The survey covers more of the funds by asset class for various periods than 350 pooled funds which are actively managed Aon Pooled Fund Universe
Average annual returns () (2)
for the periods ending June 0, 2007
Balanced funds
Canadian bonds
SC Universe
Canadian equities
S&P/TSX Composite
S&P/TSX Composite Capped
US equities (CAN $)
S&P 00
International equities (CAN $)
MSCI-EAFE
Source: The results present the combined pooled fund returns from the surveys conducted by Aon and Principia for Pooled Funds of (1) With the exception of the three-month and one-year periods for which returns have not been annualized.
(2) Returns before management fees.
Aon Consulting • Investment Consulting Insights • March 2006 Aon Consulting • Investment Consulting Insights • September 2007

Source: http://eba.benefitnews.com/media/pdfs/BenefitsNetwork/2007/08/30/133512943September_2007_Forum.pdf