increasing health care costs

Increasing Corporate Health Costs in the Age of Wellness and Prevention

The Paradox

There is a paradox for Canadian employers, namely the paradox of increasing benefit costs and absenteeism—particularly from mental health and other invisible conditions not objectively verifiable—in the face of increasing corporate spending on sophisticated, data- & technology-driven employee health promotion, prevention, support and wellness programs.

What the Industry is Saying

Some industry players have tackled this paradox: talking specifically about mental health in their comprehensive 2021 publication The Puzzle of Poor Workplace Mental Health1, MindBeacon points out that “28 million Canadians have access to mental health supports at work through Employee Assistance Programs (EAP)”, that “EAPs are quite effective in improving mental health outcomes” and “employees who access EAP services are less likely to miss work.” MindBeacon also cites the “TOP FOUR PROBLEMS WITH THE EAP (sic) STATUS QUO” as the cause of this paradox:

  • Employee usage of products is low: Estimated to be 11% for ALL EAP services
  • The products offered don’t cover all their needs
  • Lack of tools needed to track efficacy
  • A product approach vs a workplace mental health strategy

While this assessment of today’s EAPs rings true, another big player, Mercer Marsh, has identified that the cause of rising benefit costs is not the lack of benefit programs or their low utilization, but poor-quality medical care2 indeed, their 2022 publication Three steps to keep health and benefits plan costs under control states that “poor initial care […] add unnecessary cost and degrade the patient experience and outcomes.”

Amplified on one hand by the lack of sufficient data in the Canadian healthcare ecosystem—identified by the C.D. Howe Institute in 20153 —and, on the other hand, by overwhelmed doctors, seemingly compliant to all demands for time off work and with insufficient time to enable Best Care guidelines, it is clear how poor care leads to poor outcomes.

What is quality care?

The World Health Organization8 and Insitute of Medicine9 define quality medical care as healthcare services adherent to validated, evidence-based professional knowledge that increase the likelihood of desired health outcomes.

In other words, the increase in corporate healthcare costs is driven by the sub-optimal outcomes of poor quality care for mental health, specialty drugs4 and chronic diseases.

Focus on Quality Care: A New Solution to Address Rising Costs

Recognizing that only optimal, guidelines-based care brings optimal outcomes, Mercer’s Three Step solution5 cites the following to create value:

  1. Quality, cost-effective providers of medical care (plan design)
  2. A data-driven approach
  3. Driving of efficiencies

This has been confirmed by 75% of 210 global insurers of employer-funded healthcare, citing in the 2022 Health Trends report6 their top three strategic priorities to address rising healthcare costs:

  1. Data analytics—34%
  2. Provider management—21%
  3. Quality care focused benefit design—20%

In line with MindBeacon and Mercer Marsh, the 2024 workplace health solution for prevention, care and cost control must encompass:

  1. Access—Simple without wait lists
  2. Highest Quality Care—Holistic & comprehensive7 optimal outcomes for all health issues
  3. Data & data analytics
  4. Fluid multi-directional communications to break down and access siloed information  


The paradox of increasing absenteeism—and associated benefit costs—from mental health and other invisible conditions, despite the vast array of corporate health support services and their proven positive outcomes on worker productivity and mental health, has prompted a search for the missing piece to resolve this paradox. High quality care is the piece that benefit, EAP & wellness providers are missing, without which corporate costs will keep rising regardless of what other changes are made, as history has shown. Controlling benefit costs requires the optimal outcomes of early return to health, which can only be obtained with optimal early initial care, adherent to disease-specific guidelines by treating physicians for the medical afflictions driving costs: Mental health, rheumatoid arthritic, Crohn’s disease, colitis and others.

Until such time that the Mercer Marsh solution is implemented into extended benefits, health issues and costs will continue to rise, due to the sub-optimal outcomes resulting from suboptimal care, despite health offerings made available in extended benefits services.


[2], “Three steps to keep health and benefits plan costs under control”

[3] Measuring Outcomes in the Canadian Health Sector: Driving Better Value from Healthcare


[5], “Three steps to keep health and benefits plan costs under control”


[7] Comprehensive versus holistic care. Case studies of chronic disease