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We have been sharing tips and tricks for benefits cost savings this summer, partly because many organizations are tightening their belts due to the COVID-19 pandemic. It’s not always easy to enact cost containment strategies without cutting programs or passing costs to employees, but data can help. In this final part of our benefits cost savings series, we’ll share two more tips that will help self-insured employers and benefits advisors find benefits savings without sacrificing care for members.
Prescription drugs are among the most expensive and potentially wasteful areas of employee benefits. Costs for prescriptions are rising at double-digit rates each year, and many benefits teams feel helpless when it comes to finding savings. They don’t want employees to show up at the pharmacy and be asked to pay hundreds of dollars for a drug they need, but they also cannot afford to let their Pharmacy Benefit Manager (PBM) decide which medications are on their formulary.
There are a number of methods that benefits experts use to save on prescription benefits. Here are a few that won’t negatively impact employees.
Demand 100% pass through: Imagine if the employer paid exactly what their PBM paid for the medication, and they got all the incentives that the PBM gets from pharmaceutical companies. This is called “pass through,” and benefits teams should demand it from their PBMs. Any rebates, discounts, and incentives should go to the employer, and benefits teams, advisors, and consultants looking for a new PBM should make this part of their evaluation and negotiation process.
Therapeutic drug substitution: This can be controversial with patients, but if it’s done well, it can help both members and employers save on their prescription costs. Essentially, this is the process of identifying and substituting a lower-cost drug for a more expensive drug. Some less expensive prescriptions will be generics, others will be packaged differently, and still others may simply be two pills instead of one combination tablet. We recommend utilizing clinical staff to help you enact this strategy, since they’ll be vigilant about considering patient health and outcomes when adjusting the formulary.
Continual formulary management: This strategy is no secret. But how often does your PBM allow you to make formulary adjustments? Is it a time-consuming negotiation that requires a lot of resources on your end, both benefits staff and a consultant or advisor? It shouldn’t be. Continually adjusting your formulary should be a requirement during the RFP process when you’re selecting a PBM. You shouldn’t be boxed into once-a-year changes. Along with access to prescription claims data, this will allow you to monitor trends, contain costs, and make adjustments or conduct an audit on your terms and your schedule.
All of these cost saving strategies are helpful, but if you don’t have fast, flexible access to your benefits data, it will be impossible to see if they’re working for your organization and your members. Data is the flashlight that allows benefits teams to peer into the dark corners of their benefits plans, find insights, and take action.
Did you know that only 18% of benefits leaders feel that their programs are ahead of the curve? In a recent study, benefits professionals told us that they don’t feel like they’re making the most of their programs.
There was one thing that the 18% who are ahead of the curve all have in common: a strong data partnership. Whether it was with their consultant, broker, or a data warehouse, these innovative benefits leaders put a priority on access to actionable information. In fact, these relationships between consultants/brokers, employers, and data partners are the keys to innovation. Working together, benefits experts from these groups can find unique insights, come up with forward-thinking solutions, and ensure these solutions are truly making an impact on employees and their families.
So what about the other 82% of benefits leaders? Why aren’t they using their benefits data?
We hear you. This is exactly why we built Artemis Health, to empower employers and their advisors to optimize their benefits using data. We act as a critical bridge between benefits leaders, their advisors, and their data, enabling them to quickly and easily see all their data in one place so they can take action on key insights that will help their employees and their companies. Our focus is on fast answers, providing a holistic view of data, and ensuring the data is accurate to spur data-driven decisions.
We hope these healthcare cost savings tips are helpful to benefits professionals struggling to meet the needs of both their finance teams and their employees. If you’d like to learn more about how Artemis can help, get in touch.