The idea of continuous improvement is one that has found its way into nearly every aspect of running a business, and LHD brings it to our pharmacy and PBM analysis service on your behalf. By constantly monitoring your Rx plan performance, tracking industry trends, and even integrating population health data for proactive risk management, our data-driven approach identifies opportunities for corrective actions to maintain a high-performance Rx plan that meets employee needs and your strategic business goals related to the company health and pharmacy benefits plan.
Our Approach: Data-Driven Insights, Client-Focused and Member-Centric
We know what scenarios should be avoided when it comes to pharmacy benefits because we’ve seen them playing out at far too many businesses. A big mismatch can happen if the pharmacy benefits plan is aligned to the population health data of your employees. When this happens, the employees you’re trying to help by providing an Rx benefit might end up facing prohibitive out-of-pocket costs for them.
When accessibility and affordability of needed prescription drugs and medications deteriorate, so does the health, productivity, morale, and satisfaction of those employees, all of which can end up costing your company a lot of money in lost productivity and reduced retention. By contrast, when employees see you investing in their well-being with a high-performance Rx plan that works, all those potential problems will be far less likely to occur. LHD understands navigating the interconnected needs to keep your employees healthy and happy, as well as find cost savings to counter what can otherwise be out-of-control spending.
Set it and Forget it? Not a Chance.
Your Rx plan is simply not something you can afford to take a “set it and forget it” approach to, or you’ll quickly reach a point where you can no longer afford it at all. On the other hand, your company may not have the in-house expertise, time, or resources to continually monitor Rx plan performance. This is when working with LHD makes good business sense. Part of our pharmacy and PBM analysis service is to monitor Rx plan performance to proactively identify changes that can be made to improve performance as things inevitably change. Taking all the data at our disposal and carefully tracking industry trends, “high performance” are the only words you’ll ever use to describe your pharmacy and prescription drug benefits plan.
Time for a New PBM Contract? LHD Can Help!
PBMs (pharmacy benefits managers) have come to hold enormous influence as the middle-people between employer Rx plan sponsors and the pharmacies where your employees will be obtaining needed medications. Unfortunately, there is a wide range in the quality of PBM contracts. Some clearly do not have your business interests at heart, let alone the interests of your employees who need good Rx coverage. But unless you know what to look for, you may find yourself signing off on just such a PBM contract, and end up paying the price for years to come. The good news is that LHD offers a specific service to evaluate, assess, vet, and compare PBM contracts to help you understand what’s involved and make better decisions. Learn more on the Contract Analysis page of our website.
If You Don’t Measure it, You Can’t Manage it.
There are various renditions of the above management adage attributed to different people, but the gist of it is true. The question is, what should you measure? There are all kinds of performance metrics out there. One approach is to at least understand some of common performance indicators PBMs use to know what they’re paying attention to. Below is just sampling of some of the PBM metrics in common use in the industry:
- Cost Analysis: Two basic methods here are cost per member per month or cost per member per year.
- Drug Trend: Many PBMs track this metric, but how they measure it can vary widely. The general idea is to capture the change in drug costs (Rx spend) year over year. What influences this figure includes factors such as utilization rate (of employee plan members), the mix of generic and branded drugs, and inflation.
- Net Ingredient Cost: While many PBMs will tout a low drug trend figure as evidence of good performance, a more accurate performance metric would be net ingredient cost, which shows the actual drug cost (spend) for a year using an aggregated dollar amount per member per month. This figure will more accurately reveal the truth of PBM performance since it’s the foundation for all costs. Unsurprisingly, many PBMs do not share this figure with you.
- Generic Fill Rate (GFR): Given the big difference in cost between brand-name drugs and generics, this metric is a no-brainer. The higher this number, the lower the cost because generic drugs are cheaper. This one is also referred to as generic utilization rate (GUR) or generic dispensing rate (GDR).
The above are just a few examples of different Rx plan performance metrics. There are others. Rest assured LHD utilizes the best metrics to reveal the truth of your pharmacy benefits plan performance. It’s an essential aspect of digging into the data to inform better decisions and make proactive changes to control costs and better serve employee plan members.
LHD: Your Benefits Partner to Keep Your Rx Plan Performing
Pharmacy benefits managed separately from the other components of your health plan often makes sense, more so if you’ve partnered with a knowledgeable benefits advisor like LHD who can help you navigate the ever-shifting landscape Rx benefits to get better results. If you’re always shaking your head about your company’s Rx spending, then it’s time to take full advantage of the LHD Pharmacy & PBM Analysis service that includes Rx plan performance analysis and ongoing monitoring. Learn more by getting in touch through the Contact Us page of our website or feel free to call us directly at 317.751.7049. We’d love to learn more about your business and health benefits challenges and show you how LHD can help solve them!