In the rapidly evolving landscape of healthcare services in the United States, choosing the right Pharmacy Benefits Manager (PBM) is crucial for employers seeking to optimize employee health outcomes while managing costs. With increasing complexities in healthcare contracts, a lack of transparency, and rising pharmacy costs, HR professionals face significant challenges when evaluating PBM options. This blog post will unveil five secrets to selecting a PBM that prioritizes employee wellness and is committed to transparency.
Understanding the Role of a PBM
Before delving into the secrets of evaluating a PBM, it’s essential to understand the role they play in managing prescription benefits. PBMs act as intermediaries between insurers, pharmacies, and drug manufacturers, negotiating prices and determining which medications are covered under insurance plans. This position gives them considerable influence over drug formulary decisions and the overall costs associated with employee wellness programs.
However, employers often encounter challenges such as:
- Complex contracts: Many PBM agreements come with convoluted terms that can obscure the true costs and benefits.
- Lack of transparency: Employers frequently find it difficult to understand how drug pricing works or whether their PBM is acting in the best interest of employees.
- High costs: Surprise fees and hidden costs can significantly increase pharmacy expenditures.
- Profits over patient care: Too often, PBMs may prioritize their profits over the health needs of the employees.
Secret #1: Evaluate the Transparency of Drug Pricing
When assessing potential PBMs, one of the first factors to consider is their approach to pricing transparency. Who controls the drug pricing? A responsible PBM should provide clear documentation explaining how drug prices are negotiated and what factors influence costs. Look for PBMs that publicly disclose their pricing models and fully explain how they handle prescription savings.
This level of transparency not only fosters trust but also helps you understand the value received in return for any fees charged. Employers can demand detailed reports that breakdown costs associated with specific medications and the discounts negotiated by the PBM.
Secret #2: Assess Formulary Management Practices
Effective drug formulary management is essential to a PBM’s ability to promote patient care while controlling costs. How do they determine which drugs to include? Seek out a PBM that employs evidence-based medicine when curating its formulary. This approach should include considerations for effectiveness, safety, and cost.
Moreover, a finely-tuned formulary generally includes both brand-name and generic drugs, ensuring that employees have access to a range of options while maintaining affordability. PBMs should also support the use of corporate wellness initiatives through the availability of programs that encourage adherence to prescribed therapies, which in turn leads to improved employee health outcomes.
Secret #3: Look for an Emphasis on Employee-Centric Solutions
Choosing a PBM should involve a thorough examination of their approach to employee engagement regarding pharmacy benefits. Your selected PBM should prioritize employee wellness as a core aspect of its services. What initiatives do they offer to enhance employee health? For instance, explore if the PBM provides:
- Health coaching and medication management
- Educational resources that promote understanding of therapy options
- Wellness programs designed to support chronic disease management
Employers should inquire about programs that enhance employee engagement with their health benefits, as well engaged employees tend to demonstrate better health outcomes, which can directly translate into lower healthcare costs for the organization.
Secret #4: Analyze Cost Control Measures
Cost control is an integral component of PBM services. What strategies does your potential PBM employ to manage pharmacy costs? Reliable PBMs should have a multifaceted approach to reduce overall spending, which may include:
- Negotiation of discounts with drug manufacturers and pharmacies
- Utilization of pharmacy network management to contain costs
- Implementation of prior authorization processes to prevent unnecessary spending on expensive medications
Investigate how these measures are presented in the contracts and whether they align with company objectives. A well-structured contract allows for periodic reviews and adjustments based on the effectiveness of these cost-control strategies.
Secret #5: Investigate Their Commitment to Compliance and Integrity
Lastly, it is essential to evaluate the PBM’s commitment to compliance and ethical practices. How do they ensure that they are adhering to federal regulations and industry standards? The chosen PBM should have robust compliance protocols, including regular audits and adherence to the Employee Retirement Income Security Act (ERISA) requirements.
Employers should also verify that the PBM maintains integrity in its dealings and does not engage in practices that compromise the health of employees, such as promoting certain drugs based on financial incentives rather than clinical efficacy.
Conclusion
Choosing a Pharmacy Benefits Manager that puts employees first is a nuanced decision requiring careful evaluation. By focusing on the five key areas discussed—transparency in pricing, formulary management, employee engagement, cost control measures, and compliance—you can better ensure that your organization selects a PBM that fosters health and wellbeing while effectively managing pharmacy costs.
As HR professionals and employers, it’s your responsibility to advocate for your employees’ health and financial wellbeing. Consider these insights and take action to examine your current PBM options with a focus on employee health outcomes. By prioritizing the right PBM, you not only improve the wellness of your workforce but also reach organizational goals around reducing costs and enhancing productivity.