How to Know if your PBM is Creating a Cost-Effective Benefit Design
As the health care landscape rapidly evolves, managing costs while ensuring quality care is a perpetual challenge for employers and health care plan administrators. Central to this challenge is the role of Pharmacy Benefit Managers (PBMs), who wield significant influence over the design and execution of prescription drug benefits within employer-sponsored health plans. A cost-effective benefit design hinges on the ability of PBMs to strike a delicate balance between controlling costs while delivering overall health plan goals and optimal health outcomes for plan members. Here’s how you can gauge whether your PBM is truly creating a cost-effective benefit design:
Transparent Pricing Structures, Formulary Considerations and Patient Engagement: Key Indicators of a Cost-effective PBM
Transparent pricing is paramount in evaluating the cost-effectiveness of your benefit design. Your PBM should provide clear breakdowns of drug costs, including manufacturer rebates, discounts and administrative fees. A PBM that employs a single administrative fee is utilizing the ultimate cost-effective and transparency best-practice because it benefits customers by eliminating a source of hidden markups. Obscure administrative fees can blur true costs and erode potential savings, as can ambiguous manufacturer rebates. These items should be accounted for in a way that is clear, concise and easily tracked.
Another consideration in a cost-effective benefit design is a well-constructed formulary and specialty medication coverage strategy that is tailored to the specific needs of your plan’s population. Look for PBMs that regularly review and update their formularies, especially as it pertains to generic alternatives and therapeutic equivalents which can drive significant cost savings. Additionally, specialty medication’s costs and complexity are increasing, so expertise in their management is essential. Your PBM should have strategies in place to negotiate favorable pricing arrangements with specialty pharmacies to utilize generics, biosimilars and alternative dosing schedules (as appropriate) to maximize cost-savings potential.
An additional best practice of a cost-effective PBM is its robust patient support programs. Engaged and informed patients are more likely to adhere to their medication regimens, resulting in better health outcomes and reduced overall costs. Therefore, PBMs should empower patients through initiatives such as medication therapy management (MTM), adherence counseling and patient education resources so they can take an active role in managing their health.
Data Analysis Using Advanced Technological Innovations
Data-driven insights are instrumental in evaluating the cost-effectiveness of your benefit design. Your PBM should leverage advanced analytics and technologies to identify trends, forecast future costs and pinpoint areas for improvement on a regular basis. Comprehensive reporting capabilities empower plan administrators to make informed decisions and track the impact of interventions on both costs and outcomes. Frequent and rigorous data analytics allow for a comprehensive benchmarking of your plan’s performance against industry standards and comparable peer groups. This provides valuable insights into the effectiveness of your benefit design, and your PBM should conduct regular comparative analyses to identify areas where your plan excels and opportunities for improvement. PBMs should also involve plan administrators in the data analysis process and be available to transparently answer questions about their strategy as this will encourage businesses to stay engaged with the process and ensure the PBM’s tactics are above reproach.
What to Look for When Evaluating Your PBMs Cost-Effectiveness Benefit Design Strategies: Collaboration, Value Commitment, Regulatory Compliance and Culture
A collaborative partnership between your organization and your PBM is essential for achieving mutual goals. Open, unclouded communication channels foster innovation and transparency and allow for timely adjustments to benefit designs in response to changing market dynamics or health care trends. Regular performance reviews and shared accountability ensure alignment toward cost-effective outcomes. Pharmacy benefit managers should be committed to increasing value to their customers and be held to standards such as utilizing cost-effective medications, ensuring timely initiation of appropriate medication therapy and adherence to that therapy. Accountability for the PBM’s contribution to the collaboration is key to staying on track.
PBMs should also comply with regulatory requirements and industry best practices. Adhering to all relevant laws and regulations, including those related to drug pricing transparency, privacy and anti-kickback statutes, is non-negotiable for your PBM to mitigate legal risks and safeguard the integrity of your benefits program.
Finally, look for a PBM that embraces a culture of continuous improvement. Cost-effective benefit design is not a one-time achievement but an ongoing process of optimization and refinement. Seek out a PBM that demonstrates a commitment to innovation, agility, data analytics and responsiveness to emerging challenges and opportunities in the health care landscape.
Conclusion
Evaluating the cost-effectiveness of your benefit design requires a multifaceted approach that encompasses transparency, formulary optimization including specialty drug expertise, patient engagement, data analytics and benchmarking, collaborative partnerships with attention to value-added, compliance and a culture of continuous improvement. By assessing these key components, you can gauge whether your PBM is truly committed to helping you achieve your cost containment objectives while providing quality care to your plan members.
