June 9, 2015
Employers considering unconventional strategies to manage double-digit cost increases while shifting more cost to employees
CHICAGO – The Midwest Business Group on Health (MBGH), one of the nation’s leading non-profit business coalitions, has found promising insights in their fourth annual employer survey on specialty drug management. Although the vast majority of employers (88%) still rely on traditional plan designs (co-pays and coinsurance), many are ready to focus on new and novel approaches to managing specialty drugs costs.
Survey results indicate a significant number of employers (68%) are considering using a narrow network to manage patients, while less than 10% offer one. In addition, with 16% carving out their specialty drug benefit, 63% are considering moving towards this strategy. The biggest trend, however, is cost shifting. Over half of employers are considering shifting more costs to employees with 18% already doing so. In addition, 43% of the employers who shifted costs over the last three years, increased them by 50% in 2014.
These results are an encouraging sign that employers are ready to think proactively about their cost management options,” said Cheryl Larson, MBGH vice president. “It is also a reminder of the impacts cost shifting can have on employee and family members, yet most employers don’t feel they have a choice. In fact, many employers are concerned about their ability to continue to offer medical and/or pharmacy benefits in the future. For employers, doing nothing is no longer an option.
Additional survey findings include:
- Seventy-eight percent of employers are strongly concerned about the increasing costs of specialty drugs and 60% are strongly concerned about the number of specialty drugs in the pipeline.
- Eighty percent agree (34%) or somewhat agree (41%) that their Pharmacy Benefit Manager does a good job managing specialty drug costs, but 90% strongly agree (56%) or agree (34%) that new and innovative solutions to managing specialty drugs are needed.
- Even though most employers still rely on traditional plan design approaches, many are ready to think more proactively. In fact, survey results indicate that 40% of employers include vendor performance guarantees, and 51% are willing to consider this in the future.
- The top three most effective cost management strategies include: 1) coordinated information on disease therapies; 2) defined contracting terms/coverage for claims reimbursement; and, 3) day’s supply/limitations messaging.
- However, most employers (63%) don’t offer plan design elements to drive people to the lowest cost site of care for infusions, and very few offer incentives for strategies such as compliance to drugs, adherence to treatment or going to lower-cost site of care. These are missed opportunities for better cost management and patient outcomes.
Beginning in 2010, MBGH embarked on a multi-year research project intended to help employers more effectively manage specialty drug costs as this was cited as a top benefits priority with its employer membership for four consecutive years. Project goals include helping purchasers understand the landscape, emerging issues and related stakeholders, addressing key challenges and identifying innovative approaches and supporting at-risk populations through communications.
A free online toolkit is available to assist employers with planning and contracting with health plans, pharmacy benefit management firms and specialty pharmacies.
View Key Highlights of Survey
Pharmacy Benefits and Specialty Drugs Forum – July 15
To further educate employers, MBGH is hosting a Pharmacy Benefits and Specialty Drugs Forum on July 15 in Chicago. Employers and health care stakeholders will address key employer challenges in today’s pharmacy benefits environment including cost management strategies, identifying and addressing the lack of transparency in vendor offerings and sharing opportunities to better manage specialty drugs with a focus on site of care and other benefit coverage approaches. Additional information and registration can be found here.
About the Midwest Business Group on Health
With more than 120 member organizations, the Midwest Business Group on Health is one of the nation’s leading non-profit business groups of large, self-insured public and private employers serving as a catalyst for community initiatives to improve the quality, safety and cost-effectiveness of the healthcare delivery system. MBGH is an essential resource to support employers in effectively managing their health benefits through high-quality education, research, networking and benchmarking. MBGH is a founding member of the National Business Coalition on Health.