It is hard to believe that we are already into the third month of 2018! After attending several conferences over the past few months in Canada, I have noticed several common trends that are disrupting the benefit and pension industry.
Trend 1—Medical Cannabis and Recreational Cannabis
Medical cannabis has been around for thousands of years but has certainly been in the spotlight in the past year. Canadian health and welfare plans are still working out how to best support medical cannabis as part of their plans. Its impact on reducing chronic pain is beginning to be seen, but with the multitude of hybrid strains and forms in which it can be taken, it hasn’t been issued a drug identification number (DIN). This is becoming such an issue that the growers are starting to look at addressing the problem, which could lead to some standardization and the first issuing of DINs, making it far easier for plans to offer cannabis as a therapy.
To help muddy the waters, Canada, by late summer, may become the largest country to have legalized recreational use of cannabis. The legal hurdles this presents to employers are widely unknown. Just a week ago at the International Foundation Canadian Health and Wellness Innovations Conference, someone posed the question: “You can’t come to work drunk so you won’t be able to come to work high. . . . Right?” Well, we found out that unlike blood alcohol content, there isn’t a good measure of how impaired someone is from cannabis yet . . . other than bloodshot eyes and Cheezies-stained fingertips.
> Learn more about medical cannabis.
It’s no secret that drug costs are still on the rise and absenteeism due to lingering chronic pain and health issues continues to plague the workforce. The problem is that it can take several different types of drugs and dosages before the right one is found. This is particularly true with patients battling chronic pain or mental health issues.
Pharmacogenetics, the science of how a person’s genes influence how the body metabolizes drugs, is promising to help reduce the cost of drugs and increase presenteeism. Many plans around Canada are beginning to look at pharmacogenetics as a way to help their members and doctors make the right decisions on which type of medication and dosage level will best help patients the first time they are treated. There is obviously an up-front cost to getting tested, but this promises to reduce absenteeism and drug costs, which results in plan savings.
> Read more about pharmacogenetics.
Trend 3—Cryptocurrency and Blockchain
2017 saw the rise of Bitcoin and cryptocurrencies, so much so that pension funds started to look at them as a possible investment alternative in a time of relatively low interest rates. In the early part of 2018, however, we saw the rise and fall and then the rise again of bitcoin. This instability may keep pension plans from investing fully into digital currencies for now, but it certainly has some heads turning!
Blockchain, the technology that makes cryptocurrencies like Bitcoin possible, however, is being looked at closer by the investment community as well as the benefits industry. This peer-to-peer technology virtually eliminates human error and increases the efficiency of transactions and paperwork. It is already making its way into accounting, contracts and the supply chain. Chances are you are using blockchain technology and don’t even realize it (eBay, Nestlé and Uber come to mind).
> Learn more about alternative investments.
Trend 4—Artificial Intelligence
Whether you call it machine learning or artificial intelligence (AI), this relatively new technology is changing the way we live and is here to stay. Self-driving cars and drones are only the tip of the iceberg when it comes to AI. Today, medical research is using this technology not only to help doctors diagnose and treat diseases by analyzing thousands of variables, like years of test results, but also to analyze pictures and point out abnormalities to diagnose cancer before a human could possibly do so. Imagine being told you have a treatable disease months or even years before a human detect it? Not only can this save lives but also save the pocketbooks of the patients and their sponsoring plans.
On the pension and investment front, AI is just beginning. Investment managers are used to looking at a lot of data—identifying trends that can signal whether equities should be bought or sold. These trends can be microscopic, but to a multibillion-dollar pension fund, they can mean million-dollar decisions. AI is now being used to see market nuances on a whole new level so fund managers can start to use the data to make better decisions which, in the end, favour investors.
> Learn more about artificial intelligence.
Whether it is cannabis, pharmacogenetics, blockchain or artificial intelligence, I am sure you agree that each of these trends has the potential to drastically change or, as some call it, “disrupt” the benefit and pension industry. It will be interesting to see where the next few years take us. I’d love to hear your thoughts and if you or your funds are looking at these trends already.
Bradley R. Bauter
Associate Director, Educational Programs–Canada at the International Foundation