In Focus

News & Insight from Chelko Consulting
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.

read more…

Right to Try: Beneath the Surface

Right to Try: Beneath the Surface

A bill allowing patients with serious illnesses to try unproven experimental treatments has been approved by Congress and is now on its way for signature by a supportive President.

For the sake of this discussion, let’s put aside some of the safety and ethical concerns. On the surface, everything may seem palatable from a plan sponsor perspective. But that’s until you start pondering some of the potential issues lurking beneath the surface. read more…

Back to the Future: Is it Time to Bring Back R&C?

Back to the Future: Is it Time to Bring Back R&C?

Most if not all medical third-party administrators (TPAs) use “shared savings” programs to reduce the cost of non-network claims.

In the absence of a shared savings program, plans pay billed charges without any discounts after members pay the higher non-network copay/coinsurance. But with shared savings programs, TPAs use secondary (aka “blind”) networks, or negotiate directly with providers for discounts. And in return for their efforts, TPAs usually keep 25% to 35% of the savings. Are you following? read more…

Are Benefits a Popularity Contest?

Are Benefits a Popularity Contest?

We recently wrapped up a series of roundtable meetings in various cities where we discussed results from an employer survey we conducted on Plan Design Considerations & Innovations. Attendees at each of the roundtables enjoyed spirited discussion of the survey findings in general and of specific plan management strategies. read more…

Seeing Clearly: The Cost of a Miracle Cure

Seeing Clearly: The Cost of a Miracle Cure

Preparing to pay for a new era of effective gene therapy

Could you imagine seeing stars in the night sky for the first time or even the site of your own parents’ faces after ten or even twenty years of significant visual impairment? The Food and Drug Advisory Committee heard personal testaments like these from patients explaining their miraculous results as part of two experimental gene therapy trials.

More than 25 years in the making, the FDA approved Luxturna® (voretigene neparvovec-rzyl), the first gene therapy for an inherited disorder involving a progressive form of blindness, typically starting in early childhood. Currently, no pharmaceutical alternative is available for these patients. read more…

Health Plan Sponsors Need Thaler Too!

Health Plan Sponsors Need Thaler Too!

Last week, Richard Thaler was awarded the Nobel Prize in economics for pointing out that individual behavior, with respect to investing for the future, is not rational. As someone said in a recent WSJ article on Thaler’s accomplishment, “We’re a nation of procrastinators, not a nation of portfolio managers.” read more…

Elephant in the Room: Are Employers Ready to Address Specialty Drug Spending?

Elephant in the Room: Are Employers Ready to Address Specialty Drug Spending?

Specialty drug costs continue to vex most health plan sponsors. This article from NEJM Catalyst brings to light some of the key issues and opportunities for employers. It highlights the Cleveland Clinic’s recent effort to eliminate $8.5 million of annual waste associated with two commonly used cardiovascular drugs. Employers have got to like that result! read more…

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