PBMs Need to Deliver 'True Value' in the Ongoing Battle for Lower Costs
While it's quite a stretch from the local mechanic to workers' compensation pharmacy benefits, the underlying premise about not proactively using all the necessary tools to avoid more expensive problems down the road holds true for prescription drug management programs. And in many cases, the real solutions likely aren't one-time fixes because in the workers' comp and drug therapy arenas, the challenges are constantly evolving. It really requires a proactive approach from a pharmacy benefit management (PBM) company to avoid the dilemma of short sightedness as outlined so simply, but brilliantly, in the television commercial.
Most of all, says Todd Pisciotti, vice president of Sales & Marketing at Healthesystems, the Tampa, Fla.-based PBM, if a payer really wants to maintain control over the short- and long-term costs and utilization of prescription drugs for workers' comp claimants, pharmacy programs must be focused on a much larger picture than just the cost of the pills being dispensed. The number of issues that can significantly impact the ongoing success of a pharmacy program is quite large. In many cases the big difference for a truly effective PBM is how much their services and technology support a larger "value-driven" role to deliver a successful pharmacy program. Price is important, of course, Pisciotti notes, but it's hardly the lone success factor in overall savings. Other key factors impacting program efficiency and cost-savings include a wide range of topics like - strategies for managing retrospective/paper bills, using advanced data analytics to quickly address inappropriate drug use, providing clients with "real-time" data access, accommodating new regulatory changes and EDI requirements or assisting clients with other reporting needs like the NCCI medical data call. And all those actions require sophisticated technology capabilities and service expertise that go well beyond pricing alone.
"Mostly, it requires a willingness and philosophy dedicated to managing the nuances and challenges in workers' compensation, and really focusing on eliminating the complexities clients usually encounter," adds Healthesystems President Daryl Corr.
For example, Corr cites the necessity to proactively monitor and develop strategies to address the pharmaceutical market's continuous introduction of new drugs. He mentions the recent release of powerful (and expensive) drugs such as Exalgo and Embeda (both opioid analgesics), or the new formulation of Oxycontin. Knowing they are hitting the market is one thing, says Corr. But an effective PBM also should be prepared to address the potential for runaway cost from a new brand drug or the possibility of misuse.
"The other necessity is to ensure you have the right tools in place to address the challenges these new drugs may present as they are being prescribed," Corr says, adding that relying solely on retrospective drug studies to measure trends and take action is often too late and payers end up reacting to the repercussions instead of strategizing to be out in front of potential issues.
The critical thing for a PBM, Corr says, is knowing what's happening in the market well ahead of the pack and ensuring the client/payer is prepared in order to avoid the problems.
"PBM technology, when combined with clinical oversight, provides a way to quickly identify the problems and issues, and put on the brakes," he says. "A one-dimensional, purely price-driven transactional processing environment doesn't do that for payers."
Also, for most customers, the ability to provide a customized program is crucial because each client is different, having varying needs and technical capabilities. A PBM must make it their job to also be the "IT expert" and provide direction, resources and ideas on how to make the PBM program technology work better in the client's environment.
"This is not to say they need to change the way they do things," Corr says. "More important is to identify how you can innovate to make what they have available work even more effectively."
Program customizations and modifications have also become extremely crucial due to the significant changes occurring legislatively. Often, new rules must be implemented quickly and it is also critical to be actively involved in developing solutions well before new state laws go into effect.
"You can't play a passive role and just wait to see what each state is going to decide," Pisciotti says. "Having solid input with the states to help alert them of possible pitfalls and challenges they may create are important for a PBM. We do this to ensure our customers' interests are going to be represented. "
Pisciotti explains that a perfect example of this is scenario the proposed implementation of the new "closed formulary" in the state of Texas. There is a lot of work involved when this is happening, and a PBM can't just be a passive participant because the odds are likely it will get "run over" if it is not actively engaged in the process. Pisciotti says Healthesystems, for example, has been directly interacting during the legislative process in Texas to try and ensure they understand how its customers/payers will be affected by new legislation. At the same time, PBMs need a detailed understanding of the legislative scenarios, so they too can be prepared with the time and resources they may need to accommodate any new rules.
"In many cases these changes and solutions are technology driven," Pisciotti says. "So we must be flexible to be able to react and quickly implement new ideas."
That can entail improving existing products by making them more efficient or by addressing changes in the market. Either way, an effective PBM always should be looking to develop new, innovative solutions.
Another solid example of the bigger picture issues where a PBM can make a difference is addressing the exploding costs coming from repackaged drugs or compounded pharmaceuticals. When Healthesystems first started reporting on this disturbing trend a few years ago, some industry insiders ignored the issue because it was (and to a certain extent still remains) a relatively small percentage of overall prescription volume. Yet, considering the overbilled amounts in the most egregious cases, the dollars lost are hardly insignificant. More importantly the growth from these dispensing sources has been exponential over these past five years, and not showing any sign of slowing down. PBMs must keep customers one step ahead, looking for ways to minimize the financial impact of this type of trend.
"When you speak with payers today, they are very savvy," Corr says. "They want and need more data, and they want it faster. They also demand more tools to make their claims professionals' lives easier. "
While overall claim volume hasn't grown very much in recent years, the complexities involved with managing those claims are much greater. So having easy-to-use self-service tools and quick access to meaningful data is crucial. In fact, making these tools user friendly and incorporating workflow methodology not only saves time and administrative effort and costs, it also eliminates the confusion when claims professionals may be using multiple tools from other providers.
"We have been very fortunate," Corr says. "The adoption rate of our technology has been tremendous."
In fact, since introducing its technology, almost 90% of prior authorization activity occurs using Healthesystems online web portal tool, called Vertice. The result? An adjuster never has to pick up the phone unless it's absolutely necessary. And because the transactional environment is happening in real-time, the Healthesystems customer service staff responds immediately (removing what used to take multiple phone calls). Healthesystems also provides injured workers with a more reliable, "high-touch" service experience.
"Approximately 16 percent of time when a pharmacy transaction requires a prior authorization, the injured worker is right there, standing at the counter," Corr says. "You can't delay in responding or resolving issues."
In the end, an effective PBM must be focused on providing greater value to customers because as results have clearly demonstrated, drug discount pricing alone will not equate to better overall results. For instance, having less expensive Oxycontin doesn't do you any good if it is being dispensed more often, in larger quantities and worse, innapropriately. It has been proven time and again, Corr explains, that the price of the pill is not necessarily driving the cost; it's more likely to be the amount and frequency.
"There are a lot of value added services that many PBM's aren't necessarily doing. Most of these opportunities require 'heavy lifting' and equate to leaving money on the table," Corr says. "Above all, a PBM should be there to manage the entire workers' compensation prescription drug continuum. In the end, payers will realize greater cost savings combined with solid strategies to continue succeeding in the long run."
(The above piece is part of our continuing Insights series designed to highlight key products and services to our readers. This paid-for Insights was written and edited by Risk & Insurance®
on behalf of our marketing partner. Additional Insights can be found on our Web site at www.riskandinsurance.com/.)
October 27, 2010
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