The Shiny Promises and Hidden Realities of Integrated Carriers
When Dorothy arrived in Oz, she quickly learned the yellow brick road didn’t lead to a magical wizard but rather to a man behind a curtain. She’d been promised an all-powerful wizard who could grant her most important wish, but she was deceived.
She was lured by the shiny promise of a Great Wizard who could fulfill her desires, only to find a little old man at the end of a road full of disappointments. The shiny trophy she sought turned out to be a rusted old cup.
Integrated carriers may offer you similar shiny promises. You may be convinced that working with them will provide your members with the best care, and your company with the greatest savings, and the easiest plan management.
Integrated carriers provide both medical and pharmacy coverage. Opting to put all plan coverage under an integrated carrier means you’re “carving in” your pharmacy benefits, managing them alongside your medical plan.
However, self-funded employers may also “carve out” their pharmacy plan by tapping a third party like a Pharmacy Benefits Optimizer (PBO). A PBO provides dedicated pharmacy plans that are “carved out” from your medical plan, focusing solely on optimizing your pharmacy benefits.
Choosing to carve out can significantly improve your bottom line and can provide you with a plan that better aligns with the needs of you and your members, leaving you at the top of the podium holding a truly shiny trophy.
The Lure of Shiny Promises
On the surface, integrated carriers’ promises seem like a clear path to success, but the reality often falls short.
The Promise: Lower Healthcare Costs and Better Member Outcomes
The Reality: An integrated carrier will focus almost exclusively on managing your overall healthcare spend, primarily emphasizing medical costs. Without dedicated attention to pharmacy, your pharmacy spend and trend will inevitably increase. Unless providers are committed to leveraging your members’ integrated data, there’s little value. You will quickly lose visibility into how clinical decisions are made related to pharmacy.
The Promise: Easier Plan Administration and a Better Member Experience
The Reality: Carriers can’t tailor benefits to meet the unique needs of your population. You will end up using an off-the-shelf plan that might not align with your objectives and could leave your members frustrated. Members may be faced with long wait times at call centers, and you may be faced with being a low priority due to your account size.
The Promise: Streamlined Processes and Reduced Costs
The Reality: Integrated carriers are accountable to numerous stakeholders, including shareholders. Your needs may not always align with their financial goals, so your members might not get the full focus and attention they deserve. Carving out allows you to have a dedicated team that prioritizes you and your members. You may quickly become frustrated by the limited customization and question whether the integrated model truly drives better health outcomes and costs.
The Promise: Budget Predictability with No Unforeseen Claims
The Reality: Your plan may cost more than it should due to a lack of flexibility or inherent flaws in processes meant to protect your plan. Carriers don’t give the proper focus to the 2-3% of members who take specialty medications that account for half of your plan cost, missing a significant opportunity for savings.
Chasing shiny promises that only lead to a man behind a curtain can be devastating to both your finances and your members. The hidden realities can result in you holding a rusted trophy in a game where you didn’t fully understand the rules.
What Happens When You Carve Out Instead?
In 2016, a home healthcare provider with 1,600 members faced rising pharmacy costs and enlisted RxBenefits to manage their pharmacy plan. For five years, RxBenefits delivered effective management. However, in June 2021, they were lured by the shiny promises of lower fees for their medical plans and left RxBenefits for an integrated carrier.
Their plan costs skyrocketed within a year because the carrier left their specialty spend unchecked. One year later, their per member per month (PMPM) cost increased by 49.7%, with over half their spend attributed to specialty medications.
The promise did match the reality. They lost the ability to customize their pharmacy plan to their specific needs. Two years later, they said goodbye to their integrated carrier and carved out once again with RxBenefits. Within one year, they saw a 26.4% improvement in PMPM.
We’ve all been tempted by shiny promises that left us standing on the sidelines holding a decaying piece of metal. But it doesn’t have to be that way when it comes to your members’ care. Integrating your member data into a dedicated pharmacy plan can put you and your members in the lead so you can be the one standing at the top of the podium.
