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Runaway drug costs call for a new approach to care management, such as a different way of thinking about managing the health of the employee population.
A perfect trifecta of big, big, and big has put an out-of-control bend in the healthcare cost curve.
This bend is affected by drug costs driven by big pharma, it’s manufacturer-driven, has rebate-based incentives propagated by big pharmacy benefit managers (PBMs) and big healthcare companies merging to create even bigger companies that create a “watch my other hand” distraction. This continues to take focus away from the proactive pursuit of appropriate pharmacy spend.
The problem is, the bigger these companies, their treasure chests and their shareholder requirements get, the less the incentive for them to embrace approaches that will truly disrupt the cost curve and create greater prescription affordability.
We need broad and disruptive thinking, not point solutions that haven’t worked for years.
The status quo isn’t working
The large PBMs, and some benefit consultants, will say that PBMs have been declaring flat trend for a couple of years. However, this declaration can be made only by artificially deflating the gross prescription spend via an unpredictable rebate check to get to a more manageable net-spend number.
This deflation of the trend via a rebate check does absolutely nothing to ensure the drug mix for an employee population is appropriate. The bottom line is that industry-standard clinical and care management programs have had a negligible impact on both containing prescription costs and driving appropriate patient-centric utilization, as demonstrated by the persistent dysfunction in pharmacy spending.
Examples of this are:
This calls for a bold and different way of approaching the care management challenge. For example, a different way of thinking about managing the health of the employee population.
Inadequacies of current clinical and population health strategies
We’ve all heard, nationally, 5% of the population is driving 50% of healthcare costs. Population health management has been a promising approach; by targeting costlier sub-groups, we can drive down costs with much more return on investment.
There’s wisdom here, but the execution, thus far, has been self-limiting. Here’s why:
Not all employee populations are alike and this complete lack of creativity in approaching population health management has resulted in plan sponsors consistently experiencing a 12% to 18% gross pharmacy trend.
Practical yet innovative Rx population health management solutions
True industry disruption requires a tailored approach to population health management, one that accounts for the very specific needs of a plan sponsor’s membership and their unique risk profile. This approach needs to be divorced from any preconceived notions of specific high-cost conditions and their ability to drive spend. What is needed is a holistic approach that addresses the higher risk levels within that specific population in a completely condition-neutral fashion.
Here’s what such a program looks like:
The output of a well-executed population health management strategy can reap major dividends in the pharmacy benefits space where results can be conclusively measured and monitored. This approach to population health is also congruent with the core philosophy of value-based care which is about doing the right thing in an aligned manner across all pertinent stakeholders.
The results of this approach can drive a 2% to 3% multi-year gross pharmacy trend with consistent clinical outcomes, 93% medication adherence and better managed gaps in care.
Karthik Ganesh is President of EmpiRx Health, a boutique risk-bearing PBM with a differentiated population health management solution and 2.3% book of business trend.