By Molly Mulebriar – Special To RiskManagers.us Blog
A county’s self-funded health plan was bleeding. Prescription drugs were out of control, representing 50% of plan spend. County officials had to make a decision whether to continue their group plan or gift employees money to buy individual policies through an ICHRA.
Something had to be done because (1) The county couldn’t print money, (2) Raising taxes was out of the question, (3) They couldn’t negotiate with pharmaceutical manufacturers, (4) They had no success negotiating prices with their PBM middleman, (5) Their broker said there was little he could do, (6) The local pharmacists had no control over PBM negotiated costs and (7) They listened to us.
The county decided it made sense to exclude all brand name and specialty drugs (See #7 above).
They learned that according to FDA statistics 90% of all prescriptions are for generic drugs:
“In the United States, 9 out of 10 prescriptions filled are for generic drugs. Increasing the availability of generic drugs helps to create competition in the marketplace, which then helps to make treatment more affordable and increases access to healthcare for more patients. Learn more about the FDA Drug Competition Action Plan.” SOURCE: Generic Drugs | FDA
They also learned there are high claim cost diversion strategies and federal programs to help those needing more expensive (legal) drugs (See #7 above).
Their plan now covers only FDA approved generic drugs. There are more than 10,000 FDA approved generic drugs covering every therapeutic class benefiting all county employees. The average cost of a generic drug is $17-$23 per fill. In many instances it is a lot less than that.
The county’s approved drug listing can be found here.
The county decided there was no need for a PBM middleman anymore. Instead their plan pays cash at the point of sale through a special pre-loaded generic drug debit card emblazoned with a PTL (Praise The Lord) logo. All patient financial responsibility is waived (See #7 above).
Their planned next step is to pay all other covered medical expenses with cash at the point of service for all upstream referrals in partnership with a select direct primary care provider (See #7 above).
All plan member financial barriers to covered medical expenses including in-patient and out-patient hospital services, free standing surgical centers, specialty care and all other eligible medical expenses will be waived giving a new medical meaning to FREE. Erecting walls to needed health care has never made sense. Breaking them down does.
Direct primary care coupled with upstream cash pay strategies is expected to reduce health care spend by 50-70%. Average medical PEPM has been known to reduce to approximately $225 and Rx spend to about $25 using this strategy (See #7 above).
County health insurance funding is expected to reduce dramatically. The difference will be gifted to all plan members in the form of an across the board bonus based on a predetermined formula shared with the public (See #7 above). The formula Bonus Accumulator Data (BAD) will be tracked monthly for all plan members to see as an encouragement for members to spend health care dollars as wisely as possible.
TPA administrative services will continue to track cash paid claims for reporting purposes and stop loss insurance claim settlement. Traditional TPA customer service will be replaced with a dedicated independent concierge service with a special team assigned to each individual plan member. As a result traditional TPA fees will reduce. Stop loss premiums will reduce too (See #7 above).
Administration costs, including stop loss insurance, will be below industry norms. Medical trend will be eliminated. Plan members will continue to get the care they need and it won’t cost them a dime (See #7 above).
Meanwhile back in Status Quo Land the corporate health care monster roams free and wild…………..
This article is only partially false based on adjusted facts artfully colored by the author who admits is often under the influence of wishful thinking founded upon the opaque reality of proven out-of-the-box risk management strategies that reduce costs while improving benefits at the same time.
An investigative reporterette and former Miss Texas contestant (and the 2018 Tejano Jalapeno eating champion), Mulebriar makes her home in Waring, Texas. She is an infrequent contributor to this blog.
RELATED BLOG POSTING: