Insurance companies influencing which health-care provider you should use
It happens every time Michael Law files a claim to his workplace benefits provider, Sun Life.
Whether it’s for a visit to the massage therapist or physiotherapist, whenever he submits a bill, he says the Sun Life website prompts him to provide a star rating for that particular health service provider.
“I was confused about why someone was asking me to do that in the context of trying to submit a claim,” said Law, a professor at the University of British Columbia who researches the private drug insurance industry.
And even though he always declines to provide a rating, Law says the online hub will, without fail, prompt him to do so. Called Lumino Health, the hub allows employees who have Sun Life as their workplace benefits provider to access more than 34 million ratings by Sun Life group plan members of more than 200,000 health service providers across the country.
“The fact that I said no and yet continue to get prompted to submit a rating certainly indicates to me that the insurer really has an interest in getting that data,” he added.
What Law experiences when filing his claims is just one element of a broader trend across the workplace benefits industry in which insurance companies are increasingly acting as intermediaries between consumers and health services providers and suggesting certain providers over others. Think Google for consumers searching for a chiropractor, physiotherapist or dentist.
Gone are the days when you would simply submit your chiropractic or massage therapy receipts, wait a week and then get a reimbursement cheque in the mail.
Now, workplace benefits providers offer slick online portals that act almost like one-stop shops providing information on and facilitating access to paramedical services, dental care, mental health supports, primary care and virtual pharmacies that will ship medications straight to the consumer’s door.
When filing a claim using Sun Life’s mobile app, for example, plan members could encounter a pop-up message promoting Lumino Health Pharmacy, an online pharmacy — in which Sun Life has an ownership stake — that promises a quick connection to a pharmacist and easy access to medications through free home delivery.
Some workplace benefits providers, such as Manulife and the Ontario Teacher’s Insurance Plan, have also promoted “preferred provider networks” (PPNs), in which insurers direct which pharmacies its members must use to be covered, usually for high-cost specialty drugs — a controversial practice that has recently faced public blowback.
Whether it’s marketplace ratings, virtual pharmacies or PPNs, some health system observers say with these practices insurers stand to wield a lot of influence and make a lot of money.
“Insurers do things to drive business,” said Law, Canada Research Chair in Access to Medicines. “At their core, I think you can rightfully envision these things all as business propositions, so whether that’s increasing the satisfaction of their members or driving revenue streams.”
The insurance companies that spoke to the Star for this article say their goal is to help Canadians navigate the health system to access the care they need and want in the most convenient ways possible.
“Our Canadian employer clients and their employees — our group plan members — are asking us to do this,” said Dave Jones, president of Sun Life Health. “What we’re trying to do is just help them live their healthiest life by making it easy for them to find care, access care, navigate the ecosystem and then to be able to afford it.”
But any comparison of Sun Life, which is also a benefits provider to Star employees, to a search engine is misplaced, Jones says.
“Those marketplaces are all about advertising, finding eyeballs and users, and that is not the model we’re trying to pursue,” he said, adding that Sun Life helps consumers to find health services in a market that can often be confusing, paying some 85 million claims a year. “What we’re doing is we’re bringing it together and packaging it for the busy employee, the busy family person.”
The business model employed by GreenShield, Canada’s only national non-profit health and benefits company, “is designed around advancing better health for everyone,” according to spokesman Andrew Bond.
A key part of this goal is GreenShield+, which the company describes as an integrated health and benefits platform through which customers can search and connect to health-care providers, keep track of their benefits and submit claims. Users can also directly access mental health counselling through the platform.
“We believe integration is the future for health insurance and health-care systems across the country,” said Bond, citing a recent survey the company commissioned that found Canadians are spending 2.5 times more time navigating the health care and benefits environment than they’re spending at their medical appointments.
Manulife Financial, Canada’s largest insurance company, recently partnered with Aeroplan to allow plan members to earn points when they engage in health and benefit-related activities. It also launched a mobile app that includes personalized recommendations and a live chat function to connect with health service providers.
A handful of insurance companies are also expanding into the lucrative pharmaceutical industry.
In 2023, Sun Life announced a minority investment of $9.5 million in Pillway, a Canadian digital pharmacy, to power its virtual Lumino Health Pharmacy. GreenShield also has its own online pharmacy. Both companies stress that the use of their pharmacies by plan members is completely voluntary.
The Ontario Teachers Insurance Plan (OTIP) last year joined forces with consulting company Cubic Health, to launch MemberRx, a plan-sponsored pharmacy serving the province’s teachers exclusively.
The company says that all proceeds from MemberRx related to the distribution of medications and provision of pharmacy services are reinvested to help reduce benefit plan costs.
“This helps to ensure the sustainability of the highest quality medicines and services over the long term,” said OTIP spokesperson Jessica Adams.
UBC’s Law says where virtual pharmacies could become problematic is if insurers started to impose on consumers a financial incentive or mandate that they use a specific pharmacy, “particularly in the case where there’s clinical reason” why that consumer might want to have a consultation with a pharmacist they know.
One of the reasons insurance companies are offering a variety of different workplace benefits is because they are competing for the business of employers and their workers, says Olga Morawczynski, founder and head of Wellbeing Programs at Heal-3, a Toronto-based company that designs holistic mental health programs for organization.
“Insurers are looking for ways to differentiate themselves, whether by adding a comprehensive network of practitioners, supporting direct billing for health services, or offering air miles on health-related expenses,” said Morawczynski. “Over time, employees become accustomed to these benefits, making it harder for employers to switch insurance providers. What starts as a value-added service ultimately evolves into a retention strategy.”
While insurance companies compete by differentiating themselves as much as they can, there is one feature that has raised the ire of some health providers: Sun Life’s star rating system. And there is a debate about whether star ratings are accurate tools at all for determining clinical quality.
“Evidence shows that review-based ranking systems do not accurately measure the quality of care or help people make effective health-care decisions,” said Greenshield’s Bond.
Kyle Whaley, executive director of Propel Physiotherapy clinics and a member of the Ontario Physiotherapy Association’s board of directors, says Sun Life’s star system “looks a lot like they’re trying to influence the consumer.”
“Don’t get me wrong, I don’t have an issue with insurance companies providing information to their members to make informed decisions. However, that’s it,” he said.
Patients are, of course, free to write whatever they want when reviewing their health-care providers, says Maneesh Jain, president of the Ontario Dental Association and a family dentist in Guelph. But he wonders how the ratings are solicited and how they are vetted, if at all.
“We’re concerned when such ratings are presented as credible or accurate by a body with a financial interest in the patient’s care,” he said. “If ratings are going to be provided, it’s vital that they’re accurate, credible and the process behind those ratings should be completely transparent.”
Morawczynski raises the prospect that insurance companies might be tempted to one day charge those providers for inclusion on such listings.
“Imagine Sun Life saying, ‘We’re driving customers to you through our marketing and providing a steady stream of clients. To stay on our provider list, we’re asking for $20 a month.’ Many practitioners, who are reliant on customers from Sun Life’s Lumino platform, would likely agree. By expanding their ecosystem to include practitioners as paying customers, insurers are creating entirely new revenue streams.”
A Sun Life spokesperson told the Star that the company’s rating and review feature “serves to enhance the client experience” and enables members to “share and read reviews from peers about their personal experiences.”
The company added that submitting a rating or review is completely optional and is not used to rank providers, nor influence search order. It did note, however, that clients do have the option to filter providers based on rating.
Last summer, the Ontario Teachers Insurance Plan’s MemberRx was the subject of a complaint to Ontario’s pharmacists’ regulator over a requirement that consumers needing certain high-cost specialty drugs had to fill their prescriptions exclusively at that pharmacy if they wanted those drugs to be covered by the plan.
The complaint, filed by Waterloo teacher Amy Miller, alleges this requirement amounts to a PPN, in which plan members are not able to use their medication coverage outside of pharmacies controlled by plan sponsors.
The idea is that as more plan members are required to fulfil their prescriptions at pharmacies in the PPN, these pharmacies can in turn offer high-priced drugs at a lower cost, thereby lowering the cost to the plan sponsor.
Aly Haji, a health care and regulatory lawyer representing Miller, whose complaint is pending before the complaints committee at the Ontario College of Pharmacists, says PPNs restrict patient choice and autonomy by forcing patients to pay more — sometimes in the order of tens of thousands of dollars — if they want to keep going to their own pharmacy.
“Patients have no choice but to lose the personalized pharmaceutical care that comes from the pharmacy and pharmacist they trust to afford their medications,” he said.
Haji added that the refusal of some PPN pharmacies to dispense lower-priced medications results in the possibility that a patient could end up dealing with several pharmacists at different pharmacies, which could lead to serious safety risks.
Teachers’ plan spokesperson Adams said that while pharmacist lobby groups work hard to “protect the profits of their members,” the plan is focused on “ensuring the highest quality care and benefits for our members and plan sponsors.”
“OTIP is confident that MemberRx provides plan members with the highest quality specialty medications in a flexible and convenient way, without the profit motive of a traditional pharmacy,” she added.
PPNs have raised the public’s ire before. In early 2024, Manulife faced widespread criticism after it told plan members in late January they could only fill prescriptions for more than 250 high-cost drugs at Loblaw-owned pharmacies, such as Shoppers Drug Mart. Less than three weeks later, Manulife walked back the arrangement and told plan members they could fill their prescriptions where they liked.
PPNs are also the subject of scrutiny at the Canadian Pharmacists Association, which says it has seen the arrangements “creeping” from high-cost specialty drugs into other drugs. One pharmacist who spoke to the Star said she has seen customers being told by their insurance companies that they have to use specific pharmacies for drugs that aren’t typically associated with PPNs, such as antidepressants, heart-failure medication and even the diabetes drug Ozempic.
“We’re concerned that your payer is starting to wedge in between you and your health provider,” said Joelle Walker, vice-president of public and professional affairs at the association. “It’s becoming problematic because it’s interfering in the relationship that a patient has with their pharmacist.”
Walker also raised the prospect that insurance companies who suggest plan members use their own mail-order pharmacies or PPNs are in a conflict of interest since they stand to gain financially.
“They’re able to influence things in a way we don’t think is in the best interest of patients.”
Law says the general similarity between all these relatively recent efforts to be the conduits through which consumers access health services is that insurance companies are attempting to use their leverage as the payer to direct consumers to particular providers.
“Whether that’s putting someone at the top of the search ratings or directing them to part of a PPN, all of those things will drive business toward a particular provider and in return for that the insurer is making money.”
This article was first reported by The Star
