Revealing the Hidden Realities of Integrated Carriers
When you go to the theater, the spotlight directs your attention to what they want you to see, while the rest of the stage remains visible but unclear. What you see might be an ornate Victorian sofa or a worn-out old couch; the outline provides hints, but the full picture emerges only when put under the spotlight. By shining a light on it, its true nature is revealed, bringing clarity to what was previously obscured.
Integrated carriers often promise shiny outcomes: the best care for members, the greatest savings for your clients, and simplified employee benefit plan management. However, when we shine a spotlight on the plan details, the reality might not be quite what was expected. What seemed like a perfect pharmacy plan could turn out to be a beautifully wrapped box with little to offer inside.
Integrated carriers provide both medical and pharmacy coverage under one plan, known as carving in. As you know, self-funded employers also have the option to “carve out” their pharmacy benefit plan by partnering with a specialist like a Pharmacy Benefits Optimizer (PBO). A PBO solely focuses on optimizing your clients’ pharmacy benefits, separate from their medical plan.
Choosing to carve out can significantly improve their bottom line and allow you to offer a plan that better aligns with your client’s needs, revealing a path to real value for them and success for you.
Shining a Light on the Promises of Integrated Carriers
The promises of integrated carriers seem incredibly attractive, but the reality often falls short.
The Promise: Administrative Ease
What the Spotlight Reveals: Upon closer inspection, the drawbacks of an off-the-shelf plan quickly become apparent. These plans often lack transparency, flexibility, and effective cost control. Carriers can’t tailor benefits to the unique needs of your clients. This potentially leaves them with a pharmacy plan that doesn’t align with their needs.
This misalignment can result in employers becoming a low priority because of their account size. Which can lead to dissatisfied plan members who face long wait times to speak with customer representatives in international call centers. This can cause frustrated members calling the human resources (HR) department to express their disappointment with their benefits plan.
The Promise: Integrated Plans Lead to Better Care and Bigger Savings
What the Spotlight Reveals: An integrated carrier will highlight the overall management of your healthcare spend, primarily emphasizing medical costs. However, this can often mean the cost simply gets shifted from the medical to the pharmacy benefit. Without dedicated, independent clinical management aligned with your client’s objectives and the needs of their member population, and transparent visibility to those decisions, pharmacy spend will likely escalate.
Your clients’ benefit plan may end up costing more than it should because of a lack of flexibility or other inherent flaws. Carriers often overlook the 2%-3% of members who take specialty medications, which can account for half of your plan cost, missing a significant opportunity for savings.
The Promise: Better Plan Performance
What the Spotlight Reveals: Integrated carriers are accountable to numerous stakeholders, including shareholders, which means your clients’ needs may not always align with the carriers’ financial goals. As a result, your clients might not receive the full focus and attention they deserve. The limited customization of an integrated model can lead to frustration when it fails to deliver better health outcomes and lower costs. By switching your self-funded clients to a carved-out pharmacy benefit, you gain a dedicated team that prioritizes your clients and their members.
The Promise: Better Service
What the Spotlight Reveals: Service is lackluster at best in the current ecosystem. Consultants are left to navigate the system alone, with no dedicated support to ensure their clients’ members have access to the right medications at the right time and at the right price.
No independent advocate is using your client’s data to champion for your self-funded clients’ best economic and clinical interests, free from the carrier’s influence and what they owe their shareholders. Carving out gives your client a seat at the negotiating table, substantially reducing costs and increasing value for members.
What Happens When You Carve Out Instead?
In 2016, a home healthcare provider with 1,600 members faced rising pharmacy costs and enlisted RxBenefits to manage their pharmacy plan. For five years, RxBenefits delivered effective management. However, in June 2021, they were enticed by the promises of lower fees for their medical plans and left RxBenefits for an integrated carrier.
Within a year, their plan costs skyrocketed because the carrier neglected to manage their specialty spend. One year later, their per member per month (PMPM) cost increased by 49.7%, with over half of their spend attributed to specialty medications.
The promise didn’t match the reality. They lost the ability to customize their pharmacy plan to their specific needs. Two years later, they parted ways with their integrated carrier and carved out once again with RxBenefits. Within one year, they saw a 26.4% improvement in PMPM.
We’ve all had moments where we believed in the hype and signed on for something we saw in the shadows. But it doesn’t have to be that way when it comes to your client’s plans. Carving out a dedicated pharmacy plan can give you and your clients clarity with a plan that benefits everyone.
Ready to look beyond integrated carriers for your pharmacy plan?
