In an increasingly employee-centric labor market, offering your clients a robust but affordable health benefits package is crucial for client satisfaction and retention. Recognizing that pharmacy is both the fastest-growing component of healthcare spend and a benefit that’s quite complex to manage, navigating the maze of pharmacy options can prove quite difficult. Making the right recommendation is high stakes, considering the overall impact that a bad decision could have on a client’s benefits budget and the fact that potentially catastrophic six-figure pharmacy claims are now routine.
In the battle against drugflation – the skyrocketing and unrelenting increase in pharmacy benefits costs – a pharmacy benefits optimizer (PBO) is a benefits advisor’s staunchest ally.
But what is a PBO?
A Disruptive Business Model
In a market ripe for disruption, PBOs are business entities that have emerged to operate independently of often mistrusted PBMs to advocate for you and your self-insured clients, of all sizes, in any industry. PBOs make it easier for you to help your self-funded plan sponsors carve out their pharmacy benefits, serving as your and your client’s trusted advisor.
Sometimes confused with coalitions, PBOs do more than aggregate lives to secure better rates and rebates. In addition, they peel clinical management, account management, and member services away from the PBM and deliver these services independently. Because of this powerful combination of capabilities, PBOs are uniquely able to manage self-funded plans to the lowest net cost while dramatically improving the customer and member experience. Unlike integrated carriers and PBMs that may be conflicted by their own profit motives, PBOs operate free from perverse financial incentives, advocating on behalf of the plan sponsor and its members to deliver a best-in-class benefit at an affordable price.
Data-Driven Personalized Recommendations
PBOs leverage sophisticated, proprietary claims analytics platforms to review plans’ pharmacy utilization history and identify potential savings opportunities. Operating objectively and in the plan’s best interest, a PBO will pull back the curtain to determine how well the employer’s current pharmacy plan performs, according to the existing contract. By comparing multiple PBM offers side-by-side and revealing the potential member impact associated with each offer, a PBO provides much richer insight into the true savings potential of various PBM offers, significantly outperforming the accuracy of spreadsheets. By applying deep clinical expertise (reviews by a PharmD), a PBO also provides each prospective client with tailored utilization management recommendations and laser-targeted strategies to help the plan meet its cost-savings and health outcome-related objectives.
A Negotiating Powerhouse
A PBO harnesses the aggregate negotiating leverage of millions of members’ lives under management to secure competitive pricing, rebates, and transparent, client-aligned contract terms from one or more of the nation’s leading PBMs. PBOs leveraged contracts offer guaranteed rates and rebates, reconciled annually at the individual client level. The PBO holds the PBM accountable for true-ups, when warranted.
An Independent Clinical Expert
PBOs further manage self-funded plans to the lowest net cost by providing a robust set of independent clinical management programs designed and run by pharmacists. By focusing on the 2% of members that drive more than 50% of the typical plan’s spend, these programs eliminate wasteful spending while ensuring members can access clinically effective, safe, and cost-efficient medications. This process can include:
- Excluding low clinical value drugs from the formulary when equally effective, less-expensive alternatives are available.
- Reviewing prior authorizations to ensure prescriptions are clinically sound and following FDA guidelines.
- Working with prescribers and condition specialists to ensure members receive the right drug, at the right dose and frequency, at the best price.
- Proactively contacting care providers to find equally effective, lower-cost therapeutic alternatives to some pricey specialty drugs.
Utilization management driven by independent, licensed PharmDs ensures clients can feel confident that all decisions are made by experts with the member’s health and safety, and not PBM profits, in mind. Annual savings derived from these programs average 7-10%.
Next-Level Service
For Benefits Advisors
Working with a PBO offers benefits advisors numerous advantages. Near real-time insights into current plan performance and book of business data empowers them to play offense, not defense, when it comes to managing current client expectations and renewals. The ability to quickly and accurately identify savings potential inside legacy pharmacy arrangements provides a competitive advantage when prospecting (i.e. the ability to win more business). The support of an expert team of pharmacy insiders allows them to stay abreast of emerging pharmacy industry happenings and respond intelligently and confidently to clients’ questions and emerging needs.
For HR Leaders
In an industry with a reputation for lackluster service – the industry Net Promoter Score (NPS) average is 8, on a scale from -100 to 100 – a PBO provides a high-touch service experience complete with proactive, consultative support from account management, fast issue resolution via client services, and convenient online access tools including transactional broker and member portals.
For Members
Most notably, members supported by a PBO enjoy upgraded, personalized support from compassionate representatives who are empowered to resolve their issues in a timely manner. Because PBOs focus on issue resolution – and not just ending phone calls quickly – members feel valued and can better leverage their benefit at the pharmacy, in the moments that matter most.
A Pharmacy Benefits Industry Edge
The rising cost and risk associated with pharmacy benefits are unsustainable for self-funded plan sponsors, who are largely disillusioned with the Big 3 PBMs and disappointed by various point solution providers that fail to deliver on empty promises. There is no one “silver bullet” that can change the trajectory of pharmacy spending. Rather, benefits advisors and their clients need a pharmacy benefits advisor they can trust to operate in their best interest, free of financial conflicts and the misalignments that otherwise dominate the industry. Because size and scale are core to securing a competitive pharmacy arrangement, a PBO with market-leading purchasing power and independent, award-winning services offers all stakeholders a fresh alternative to traditional pharmacy arrangements.
