How to improve pharmacy benefit management
The role of a Pharmacy Benefit Manager is to reduce the cost of prescription drugs through negotiations for deeper network discounts, higher manufacturer rebates and the application of clinical programs that direct members to the right medications.
The entire process is understandably complex and pricing isn’t always transparent — which can foster distrust in the system. Moreover, most PBMs receive compensation for each prescription filled, rather than for patient outcomes or eliminating inappropriate overutilization. Is there a better way for PBMs to deliver their services? Since prescription costs account for 20% of medical spending in the U.S. and are increasing at a rate higher than medical costs, it’s an important question.
One answer: Marrying price transparency with strong clinical programs can ensure proper administration of medication based on an individual’s needs.
Let’s start with the pharmacist. Druggists are the most underutilized resource in the healthcare continuum. The pharmacist should be at the center of care coordination to ensure that each prescription is the right medication based on each member’s unique health factors and genetic makeup, determined through pharmacogenetics and related factors. This holistic, consultative approach provides members with access to clinically appropriate medications, delivering the best outcomes at the lowest net costs to plan sponsors. This helps manage and lower trends. Then there’s pay for performance. Under a pay-for-performance model, the PBM’s goals align with those of the plan sponsor. Clinical outcomes, member safety, client and member satisfaction and cost savings become the measures of success. A PBM that operates on a purely transparent financial model can determine the best medication for the member through clinical consultation. The PBM should then facilitate any needed changes to the prescription through the prescriber. This model is certainly aligned with the plan sponsor’s primary objectives.
Another aspect to look at is eliminating the PBM revenue stream from rebates: This removes conflicts of interest and prioritizes plan sponsors over Wall Street (shareholder dividends). Medications selected for the formulary must be the most effective, regardless of cost or rebate. As a result, health outcomes improve and plan sponsors save now and in the future.
We should look at fighting contraindications with the right technology: PBMs must proactively focus on clinical efficiency and accuracy. Clinical review at the point of sale must be thorough to ensure patient safety, as soon as each claim is submitted for processing. Extra attention to detail can eliminate potential for adverse effects and reduce waste. Retrospective review programs may identify problems months after the fact, leading to wasted resources and negative consequences, which prevent benefits managers from doing their jobs. Claim processing systems must take into account all available data, including medical diagnosis codes or even pharmacogenetics testing that identifies which medications are most effective based on a patient’s metabolism. As technology evolves, so too does our desire for instant gratification. However, investing time to review each situation holistically provides the most effective level of care. This ensures safety and accuracy throughout the process and helps groups manage prescription costs.
Pure transparency effectively aligns PBM resources with a plan sponsors’ financial goals, reduces healthcare spending and increases the quality of member care. In this case, individualized care means cost savings and improved outcomes all around.