Employee Health Promotion

It’s easy to feel like your PBM holds all the power over you. In most cases, it does.

A landmark 2004 study compared what pharmacy benefits managers (PBMs) charge businesss’ plans to what they actually pay pharmacies.

Researchers found staggering overcharges – in particular for generic drugs. Regretfully, four years later, the situation has hardly changed. All too often, PBMs improve their own bottom line at the expense of the plan sponsor’s.

Chances are, it’s your health insurance provider – not yourself – who contracts with the PBM to administer the prescription drug portion of your health benefits.

So how can you feel confident your firm is getting the best value and service? Begin by asking your health-plan broker these four questions about the current or prospective PBM.

1. Precisely how does the PBM calculate price?

A lot of PBMs gain hidden profits off your plan through a practice called “differential pricing,” says consultant Gerry Purcell.

In other words, the PBM pays one price to drug retailers and then sets a lesser discount off the typical wholesale price (AWP) for your company’s plan. Example -

o  The PBM compensates the drugstore the AWP minus 18%

o  your plan and staff pay AWP minus 15 percent for meds, and

o  The PBM pockets the difference.

Now for some good news. You do have some leverage in this area. If your drug plan is covered underneath the ERISA umbrella, the PBM must disclose this info.

Ideally, you’ll find the rates are the same on both contracts. But when there’s differential pricing, insist your firm get the full discount.

2. What’s the PMPM?

One key cost figure PBMs can’t manipulate is the per-member-per-month (PMPM) cost of your plan. This number will show when your plan’s costs actually increased or decreased.

The PMPM is calculated by dividing the total costs spent by the number of staff members enrolled in the drug plan.

It’s also a excellent tool for comparing different PBMs to see which is the most cost-efficient for the size of your organization, says Peter Reed of Managed Benefits Strategies.

3. can we get rebates, too?

Some PBMs receive money from drug organizations that your brokers won’t tell you about – but could  be able to leverage to your plan’s advantage. Example – Many PBMs get rebate checks from drug organizations (typically 50 cents to $1.25 per claim) for assisting increase the sales of their products.

When you push hard enough for it, your broker may able to work an arrangement where you either -

o  split rebates from your plan evenly, or

o  let the PBM keep the entire rebate in exchange for a price break on administrative fees.

Important –  Ask to figure out all the payment types the PBM gets from the drug firms. Rebates are often couched in the form of grants or classified as access fees or formulary fees.

4. Exactly how do changes in the formulary work?

In most states, PBMs can change your plan’s list of approved medications without prior notice.

The problem –  PBMs often make mid-year switches that save them money, but may not save your corporation or employees a dime.

Example – If the PBM adopts a mail-order-only coverage policy on a certain formulary drug, an employee who needs same-day access to the medication might  be forced to pay full price for it at a drug store.

Meanwhile, your plan is still charged the formulary price.To avoid such unpleasant surprises, insist the PBM give written notice of formulary changes, including the addition of new generics.

The best employee recognition practices are often the simplest.

Here’s one that’s lately been adopted at the publishing company where I work –  a progam called “See something good, say something good.”  It’s a way for staff to bring positive attention to things that their coworkers, managers and the company’s different departments do well.

Precisely how it works –  the business provides colorful index cards, placing them conspicuously in a few commonly traveled areas in the building. When personnel and supervisors want to publically recognize someone else’s efforts, they are able to grab a card and fill it out. It takes very little time.

When the index card is filled out, the staff member drops it into a wrapped box (there are two in the building).  The boxes are later gathered and the cards displayed in a room the corporation uses periodically for meetings, presentations and quarterly staff member appreciation events.

In order to build awareness and participation in “Say Something Good,” management put up fliers around the building, so individuals  from every department can see them, in addition to visitors and job applicants who’ve come in for interviews.

The wellness program, which was originally thought up by the head of our product marketing division, does not cost anything apart from the cost of the index cards and paper. There’s minimal administration time, and it takes workers only a moment or two to fill out a card on a fellow employee’s behalf.

But the return is considerable, and the recognition possibilities are endless. It’s a good way to increase morale, encourage productivity and differentiate the business culture from work environments where the negative things seem to get the lion’s share of the attention.