Care and support of hospital and health care system employees are essential, and maintaining a rich pharmacy benefit is critical to attracting, retaining, and properly caring for hospital employees. Healthcare workers are far more likely to seek out medical services and treatments, to gravitate to new and expensive treatments, and to utilize their pharmacy benefits.
As a Human Resources team member at a hospital or health system, you understand the heavy lift of managing employee costs, leveraging their special pharmacy access resources, and providing a high level of service for both members and pharmacy teams.
Without pharmacy-specific contracts with hospital-friendly transparent pricing, terms, and guarantees, hospital HR teams can struggle to provide rich pharmacy benefits that meet the needs of employees. In our most recent hospital-focused webinar, 76% of attendees identified a lack of clear pharmacy-specific contracts as a top pain point. The reality is, inflexible contracts are just the beginning when it comes to flaws with the traditional PBM model.
Why the Traditional PBM Models Don’t Work for Hospitals and Health Systems
1. Off-the-rack pharmacy models can’t meet the uniquely specific need of hospital and health systems teams. Unlike most plan sponsors, hospitals and health systems have to meet the needs of two distinct groups with their organization.
- Your HR teams need to be able to offer excellent benefits to attract and retain the best employees while optimizing their benefits within a set budget.
- The onsite pharmacy needs to generate revenue by filling as many prescriptions as possible while optimizing resources, with the support of a fast-responding service team.
2. The contract’s fine print usually aligns with the PBM’s goals. PBMs tend to require that members use the PBM’s owned pharmacy or preferred pharmacy, but your goal may be to support an in-house pharmacy. To succeed with federal programs like 340B, hospitals need flexibility and a pharmacy partner with their best interests in mind.
3. Traditional models lack programs and strategies that align with in-house pharmacies. To stay financially viable, an in-house pharmacy needs to fill as many scripts as possible – but it also has to make sure those scripts are filled appropriately. The pharmacy may want the right of first refusal to fill prescriptions, help in raising awareness to drive utilization, and a service team that can help resolve issues quickly.
4. Standard models take an unsustainable approach to addressing risks associated with specialty. The fight against rising specialty costs starts with an aggressive contract that includes aggressive discounts and rebates. It also calls for effective utilization management – appropriate clinical oversight can determine whether a pricey specialty drug is the best option for that member and, if so, that it is being prescribed correctly. You also need to be sure your hospital or health system is making the most of available manufacturer’s assistance programs, taking advantage of savings in a way that serves both the members and the plan sponsor’s bottom line in the right way, and that those programs are being maximized in a way that doesn’t offset member responsibility for any applicable deductible or out-of-pocket obligation.
5. Traditional models often lack transparency. PBM Contracts don’t always provide visibility into terms and details that can make a difference to hospitals and health systems that depend on flexibility and control of their pharmacy benefits.
Find the right partner to tailor your pharmacy plan.
In a challenging labor market, a rich pharmacy benefit isn’t just helpful in attracting, retaining, and caring for hospital and health system employees, who are a uniquely high-risk and high-cost population. It’s critical. To achieve the best fit for your members, work with a partner that understands the unique needs of hospitals and health systems, and can help you secure and manage a contract that’s fully aligned with your priorities.