Blog Post

Employee health benefit costs are rising—and fast. Your pharmacists can help.

December 5, 2017

    Growth in health benefit spend is top of mind for employers across the nation—and as large employers themselves, health systems are no exception. One area of outsized growth is pharmacy benefit costs, which outpaced health benefit spend growth by 4.6 percentage points from 2015-2016.

    Most human resources (HR) teams rely on a commercial pharmacy benefits manager (PBM) to manage their employee pharmacy benefit and ensure the lowest possible drug costs. However, because HR lacks pharmacy and drug channel expertise, and because PBM finances are notoriously opaque, it's nearly impossible for the HR department to know whether or not they are getting a good deal.

    Pharmacy expertise can help reduce employee drug costs

    Fortunately, health systems already employ individuals with the skills to optimize the pharmacy benefit for employees and their beneficiaries. Pharmacists! Progressive pharmacy leaders are seizing this opportunity to bring value to their health system. For example, the Chief Pharmacy Officer at Mercy Health recently created a dedicated position to manage their self-insured population's PBM contract. For FY2017, they're on track to save upwards of $7M on their employee pharmacy benefits using tactics such as plan redesign and clinical counseling.

    Regardless of whether your organization has the scale to create a dedicated role to manage employee pharmacy benefits, there is likely an opportunity for pharmacy to contribute. We recommend that pharmacy leaders reach out to their HR colleagues to discuss how they can collaborate to reduce costs and improve care for system beneficiaries.

    Four strategies to discuss with HR

    1. Better manage high-risk employees

    Pharmacists can provide care management services for employees with chronic diseases or those taking high-cost medications. Discuss with HR whether there are any high-cost patient populations that would benefit from better medication management. Services may be either in-person or via telepharmacy. For example, University of Missouri Health Care uses a virtual pharmacy monitoring program to help physicians treat their health plan beneficiaries with diabetes.

    2. Recapture employee prescriptions

    Health system pharmacies are often able to purchase medications for their employees at lower prices than they would pay to fill prescriptions at an external pharmacy, resulting in lower total cost of care to the health system.

    3. Adjust benefit management

    Pharmacy leaders can provide insight into benefit design improvements to ensure lowest-cost and highest-quality care. Discuss potential tactics including: requirements for high-cost medications to be filled in-house, imposed quantity limits and split fills for expensive drugs, and using therapeutic knowledge to optimize prior authorization requirements.

    4. Develop employee formulary

    The most resource intensive item, but one that can have the most impact on employee cost reduction, is creating a custom employee formulary. This allows the system to select a list of medications for inclusion based on lowest cost, highest quality, and what their specific beneficiary population needs, rather than the typical PBM formulary based on results of vendor negotiations.

    The pharmacy skills necessary for managing employee health benefit costs can also be leveraged across other at-risk arrangements. As health systems take on risk for larger populations, managing pharmacy benefit design will become only more essential. Once pharmacy leaders demonstrate value with employee populations, this may open up the door to including pharmacy as an integral part of future joint-risk partnerships.

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