Only PBMs Benefit from Rebate-driven System [UPDATE]

Only PBMs Benefit from Rebate-driven System [UPDATE]

Jul 31, 2018 | Commentary, Value-Based Drug Management

UPDATE: The following piece was originally posted to Linked In by Rick Chelko on June 28, 2018. Shortly thereafter, Rick met with a senior Health & Human Services (HHS) official working on drug pricing reform to discuss this and related issues. Ironically, the official expressed concern that the marketplace might view the removal of safe harbor protection for rebates to be “a windfall for Big Pharma.”

Nonetheless, we were pleased to see the Office of Inspector General (OIG) and HHS submit a proposed rule change on July 18 to the Office of Management and Budget (OMB). This proposed rule appears to remove the safe harbor protection for prescription drug rebates under the Federal Anti-Kickback Statute. If and when the rule will be finalized is unclear, as is the effective date. Here’s hoping that it will be soon.

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Keeping Score: Members per Employee

Keeping Score: Members per Employee

Jul 31, 2018 | Keeping Score

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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