Buck Consultants' Annual Health Care Trend Survey Reveals Slowdown in Cost Increases for Canadian Employers

TORONTO, October 27, 2011 – After two years of increasing inflation in health benefit plan costs, Canadian employers can now expect a break, according to a survey released today by Buck Consultants, A Xerox Company (NYSE: XRX). Insurers have lowered their expected inflation costs for health benefit premiums (including prescription drugs, medical expenses, hospital coverage, and dental care) from 15 per cent in 2010 to 14.4 per cent in 2011.

The 2011 “Canadian Health Care Trend Survey,” the firm’s 11th annual study, analyzes the health cost trend assumptions that factor into the premium rate setting of 11 major Canadian insurers.

Insurers have dropped their inflation factors for prescription drugs — the fastest-increasing expense paid by group insurance plans — from 15.8 per cent in 2010 to 14.2 per cent in 2011, a 10 per cent drop.

“This is due to two important factors,” said Michele Bossi, 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, opening the door for lower-cost generic substitutes.”

The survey shows a downward trend in dental cost inflation across the country (from 8.7 per cent last year to 8.2 per cent in 2011), while hospital inflation factors have seen an overall decline since the end of 2007 (from 10.6 per cent in 2008 to 8.2 per cent in 2011). Use of dental services — a factor that is sensitive to economic conditions — has leveled off, perhaps reflecting increased employee confidence in job retention and availability of benefits. A continuing shift from inpatient to outpatient treatments has been reducing employers’ spend on hospital accommodation.

“This year’s survey results are welcome news for employers,” Bossi said. “The general trend reversal for both health and dental costs could mean we’re finally seeing the impact of wellness programs and a healthier workforce. For now, employers can breathe a sigh of relief that benefit cost trends are finally decelerating.”

Buck Consultants’ “Canadian Health Care Trend Survey” summarizes the trend factors used by major Canadian group insurers to project future health care plan costs for calendar year 2011. The survey compares current trends to results for the previous four years. The study provides trend factors by type of coverage: medical services and supplies, hospital, prescription drugs, and dental care. Dental care trend factors are provided by utilization, fee inflation, and a composite trend.

The complete survey report is available for no cost at: http://bit.ly/qrUzUZ

About Buck Consultants
Buck Consultants, A Xerox Company, provides a full range of human resource consulting and administration services, and has been providing HR consulting and actuarial services in the Canadian marketplace for almost 40 years. Our Canadian suite of services includes Health and Productivity Consulting, Talent and HR Solutions, Global Benefit Administration services, Retirement Consulting (actuarial services and tax and legal consulting for Capital Accumulation Plans and Defined Benefit pension plans), Global Investment Consulting, and Communications Services. News and other information about Buck are available at www.acsbuckcanada.com.

About Xerox
Xerox Corporation is a $22 billion leading global enterprise for business process and document management. Through its broad portfolio of technology and services, Xerox provides the essential back-office support that clears the way for clients to focus on what they do best: their real business. Headquartered in Norwalk, Conn., Xerox provides leading-edge document technology, services, software and genuine Xerox supplies for graphic communication and office printing environments of any size. Through ACS, A Xerox Company, which Xerox acquired in February 2010, Xerox also offers extensive business process outsourcing and IT outsourcing services, including data processing, HR benefits management, finance support, and customer relationship management services for commercial and government organizations worldwide. The 134,000 people of Xerox serve clients in more than 160 countries. For more information, visit http://www.xerox.com, http://news.xerox.com, http://www.realbusiness.com or http://www.acs-inc.com. For investor information, visit http://www.xerox.com/investor

Media Contacts:
Steven Laird, Buck Consultants, A Xerox Company, 416-865-0060,

Ed Gadowski, Buck Consultants, A Xerox Company, +1-201-902-2825, edward.gadowski@buckconsultants.com

To receive RSS news feeds, visit http://news.xerox.com/pr/xerox/rss.aspx. For open commentary, industry perspectives and views from events visit http://twitter.com/xeroxcorp, http://twitter.com/xeroxoffice, http://twitter.com/xeroxproduction, http://twitter.com/servicesatxerox, http://twitter.com/xeroxevents, http://www.xerox.com/blogs, http://www.xerox.com/podcasts.

XEROX®, XEROX and Design® are trademarks of Xerox Corporation in the United States and/or other countries.