How BlueCross Is Helping Employer Groups With Pharmacy Costs
Sept. 15, 2023
Pharmacy costs, like the rest of health care costs, have risen in recent years. Look no further than headlines about skyrocketing costs of insulin and other specialty drugs. Drug costs make up 27 percent of total health care costs for employers.
Business leaders may consider carving out pharmacy benefits from their health plans to address the costs. But BlueCross BlueShield of South Carolina can drive greater value through integrated pharmacy benefits.
Advantages of integrated pharmacy benefits
Data suggests combining pharmacy with medical can have a positive impact on care. Lowering the cost is just one of the benefits.
“Having that holistic view of the member allows us to better manage the member and mitigate any additional expense,” says Dr. Jay Patel, chief pharmacy officer at BlueCross.
Plans that carve out pharmacy benefits disconnects the overall picture from medical management.
We can only see doctor visits on the medical side. We can’t know if the member is taking the drugs as prescribed. We don’t know if the member is managing his or her health condition, Patel says.
For example, a member visits a cardiologist. The doctor prescribes a blood pressure medication. BlueCross wants to know the member is taking the blood pressure medication. If benefits are integrated, we can validate that prescription.
“If we see a gap in care or nonadherence, we can act on that. But absent that visibility, we can’t act on anything. Having real-time pharmacy data allows us to be proactive rather than reactive to a situation,” says Patel.
Integration leads to higher-quality care from managing chronic conditions to identifying at-risk employees and safely monitoring drug use. Integration can lower the hospitalization rate by 15 percent. It can lead to 7 percent fewer emergency room visits, according to the Blue Cross Blue Shield Association (BCBSA).
Better care management can lead to savings for employers. Integration can save $148 per member per year, according to BCBSA.
Integration benefits members and groups
This approach helps both the health plan and the member. An integrated plan means benefits managers have to deal with only one account team and one billing system.
“It is streamlined and more efficient management of employer groups,” Patel says.
The same is true for members. They have one ID card and one line for customer service.
“Issue resolution is quicker because of how complex the health care system is. People sometimes don’t understand if drugs are under the medical benefit or the pharmacy benefit. If it is integrated, it doesn’t matter,” he says.
BlueCross’ dedicated customer service team will help the member find solutions. Often, benefit integration means the member can have a single deductible instead of separate deductibles for pharmacy and medical. It makes it seamless for the member.
“It is a real-time process for members. If they reach their deductible under medical, when they go to the pharmacy the same day, they will have first-dollar coverage or no cost because we know they have met the deductible,” he says.
This isn’t just about what is good for employees. It’s also about what is good for the bottom line. The benefits compound for the management of the plan, Patel says.
“Having data correlated for medical and pharmacy is much easier to interpret and forecast from a financial perspective,” he says.
Addressing the costs
Even with pharmacy integration, drug costs are determined by the manufacturer. The drug spend in the U.S. was projected to reach $847 billion last year, with specialty drugs accounting for more than 60 percent of the spend.
“We can put in cost containment strategies. We can put in programs to make sure that drugs are being used correctly and that members truly need high-cost drugs. We can confirm the necessity of the medications. But at the end of the day, the drug cost is the drug cost,” Patel says.
For example, studies show 1 in 4 people with diabetes are rationing their insulin because it’s so expensive.
Because of this, BCBSA and Blue Cross and Blue Shield companies across the country created CivicaScript to bring lower-cost generic prescription medications directly to consumers through hospital or retail pharmacies. The effort will target high-cost generic drugs across multiple therapeutic areas to drive savings and lower the cost of medications for members and employer groups.
“As a payer, we have recognized that price points are driven by manufacturers. We have stepped into the manufacturing space to address the rising cost of pharmaceutical drugs. We are not going to be handcuffed by manufacturers,” Patel says.
The idea is to put more competition into the market to address the costs.
“The vision of CivicaScript is not to be market dominant but more so to have market impact. We want to do whatever it takes to gain a volume of prescriptions to affect the market and drive down costs,” he says.
This innovative solution will benefit everyone, from members who need the drugs to the employer groups and health plans that manage the payment of those drugs.
The first drug to launch through the partnership will be abiraterone. It is a treatment for prostate cancer. Insulin will follow in 2024 costing consumers $30 or less per vial. Overtime the scope will expand to include other generic drugs.
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