October 2012 Bulletin

Theseare created to make sure high priced drugs (those in excess of $10,000 annually) and biologics are used only after a complete understanding of the member's condition has been secured. A thorough review to ensure the less expensive, but equally effective drugs, are used first and coordination with available government programs will provide important savings to plan sponsors. 
 

Drug utilization reviews

A complete review of drug prescription and dispensing patterns will help determine areas where cost cutting can be made. In many cases, recommendations may be based on observing under-utilization of generic products and days-of-supply that seem too short. If members can be encouraged to ask for 90-day fills on maintenance drugs where their treatment protocol has achieved some confirmed levels of stability, the plan may be in a position of saving $20 to $25 per calendar quarter per individual by simply minimizing dispensing fees. Small numbers add up, particularly across mid- to larger-sized companies.

Many more programs exist to help plan sponsors control their costs without increasing costs to plan members or impacting their health negatively.

Proof of performance

 
Once the plan has been designed and the claims start coming in, what assurances does the sponsor receive to show their hard initial set-up work is being honored?

Most carriers and adjudication firms measure their performance to key performance indicator (KPI) targets. A select few might submit their books of business for evaluation to an independent third party to prove their success in achieving cost savings. If so-what information can they share that provides proof that their systems are delivering the results that sponsors crave?

Evaluation proving lower than industry average drug costs per claimant might suggest a service-provider's ability to deliver a more sustainable level of service for sponsors and members alike. This review may reveal stats showing longer days of supply, higher numbers of drugs included on special authorization lists and a sophisticated approach to formulary management. It could be argued that service providers with these characteristics are in a position to deliver superior value.

As a plan sponsor, you should ask to see some kind of documentation that serves to prove the service provider's performance levels and ability to deliver performance as promised. This information is usually highly sensitive, so it may not always be possible to get a hard copy but the information should be provided for your review on request.

Solidifying member understanding