Prescription drugs are usually the most claimed item in a benefit plan. When addressing ways to reduce the claim cost for drugs, it’s important to remember why the drug coverage is being offered. A group benefits plan has three purposes. First it protects employees from a catastrophic loss due to health. This is insurance. Today, even common chronic conditions like high cholesterol can cost almost $10,000 per year; this firmly places drug coverage in the insurance category. Second, it acts as compensation with coverage for day to day expenses like dental, vision and health services like massage. Third, the plan supports employee’s health in a preventative manner.
Keeping in mind that drug coverage is insurance, I have categorized solutions into four buckets.
Bucket #1: Plan Design
There are two basic plan design features that should be part of every plan:
Other plan options:
It may be tempting to put a maximum on drugs. Avoid this if possible. Even a maximum of $50,000 limits the drug insurance and your employee’s ability to access a life saving drug. Drug maximums also pose an ethical dilemma and could be seen as a fundamental change to compensation especially when you have an employee or dependent using a high cost drug. Formularies such as those offered by the Reformulary Group are under utilized ways for employers to keep their drug plan sustainable while encouraging employees to make informed, smart drug choices.
Bucket # 2: Increased adherence to medications
Adherence to prescriptions reduces the overall cost of a plan member’s chronic condition, especially those with multiple chronic conditions. One way to increase adherence is with a dispending fee frequency limit (DFFL). This is not to be confused with a dispensing fee cap. The DFFL sets a threshold for the number of dispensing fees paid for by your plan for maintenance drugs only. A DFFL encourages plan members to fill maintenance drugs in three-month supplies which is known to increase adherence to medication
There are other programs that can help increase adherence such as the online pharmacy PocketPills. PocketPills combines personalized packing with technology to manage an employee’s medications. Their system helps employees remember to take their medications as prescribed by their physician, plus they have a low mark up and dispensing fee.
Bucket #3: Preventative healthcare
Preventing drug claims from happening in the first place is the best way to keep drug cots low. Many chronic conditions can be prevented with lifestyle and fostering a culture of wellness. Focusing on mental, physical and financial health will positively impact your claims. Many insurers have free wellness programs and mental health support built into your plan for free.
Bucket #4: Education
Do you and your employees know about the programs available to you from your insurer?
What programs does your local pharmacist offer? What about online and mail order pharmacies?
What do employees know about shopping for the best price for prescriptions?
Do employees know how to manage their conditions?
Are employees using the technology provided by the insurer?
Insurers have built in a lot of resources, programs, and tools for employees. But employees can’t utilize these if they don’t know they are there. Ask your advisor what your insurer offers and have an employee communication strategy.
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