Keeping Score: Net Cost per Script

Keeping Score: Net Cost per Script

While it might not appear to be a telling indicator, net cost per script can quickly reveal a great deal about your current prescription drug plan performance.

The number can range substantially based on plan design, drug mix, and your current PBM deal. A high cost in this area could be an indication of excess prescription drug spend or issues with your current PBM arrangement.

How does your plan compare? Let us know if you would like to gain more insight into this spend and ways to manage costs.

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Keeping Score: Members per Employee

Keeping Score: Members per Employee

In our most recent employer data collection efforts, we discovered many fascinating insights. One of those being the importance of understanding and managing your member ratio ― the number of members enrolled for every employee enrolled. The data showed a strong correlation between the member ratio and per employee per year (PEPY) health plan costs ― about $500 for every 0.1 change in the member ratio.

A high ratio may be the result of plan design, ineligible members enrolled, or just a factor of your plan’s demographics. Understanding your member ratio, the root cause, and how to manage this number is critical to controlling plan costs.

How does your plan compare? Let us know if you would like to gain more insight into this spend and ways to manage costs.

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Keeping Score: LTD Income Replacement Benefit Percentage

Keeping Score: LTD Income Replacement Benefit Percentage

The prevailing income replacement benefit percentage in Long Term Disability (LTD) plans is 60%. Roughly 62% of LTD plans proved a 60% benefit level. The next, but far less common, benefit levels are 50% and 67%. Likewise, the use of a 24-month “own-occupation” disability definition dominates the market with about three out of every four plans using this definition.

How does your LTD coverage compare? Let us know if you would like to better understand your disability benefit options and what you can do to manage these programs.

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Keeping Score: Specialty Drug Spend through Medical

Keeping Score: Specialty Drug Spend through Medical

Most benefit managers recognize specialty drugs as the primary cost driver in their prescription drug benefit programs. However, when asked, they don’t know how much they are actually spending on specialty drugs within their medical benefit.

It really isn’t their fault, the TPAs and insurance companies aren’t very good at reporting it (which might cause you to question their ability to manage it). As such, little attention has been focused on the medical portion, even though it generally accounts for more than a third of plan spend on specialty drugs*.

How do your plan results compare? Let us know if you would like to better understand the specialty drug spend in your plan, and what you can do to manage it.

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Keeping Score: Annual Claims per Employee

Keeping Score: Annual Claims per Employee

Knowing your organization’s number of annual claims per employee is an important piece in understanding its medical cost drivers.

When viewed in conjunction with cost per claim, you can quickly assess what is driving your per employee plan cost – is it usage/volume (more claims) or price/intensity (higher cost claims)? Once that’s determined, you can focus your management energies in the right place.

Let us know if you would like to learn more about how to improve your score in this area. (more…)

Keeping Score: What’s Your Rx Spend PMPY?

Keeping Score: What’s Your Rx Spend PMPY?

Prescription drugs can be difficult to manage in a plan, especially if you don’t have a good grasp of all the related metrics.

  • Do you know what you’re spending on every member in a year?
  • How do your Rx numbers compare to our database?
  • Do you know what’s causing the changes in your drug costs year-to-year?

There are several strategies and tools employers can deploy to mitigate rising prescription drug costs. But first you need to track these numbers to get at the root cause.

Let us know if you would like to learn more about how to improve your score in this area.
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