Are more prescription drugs better or worse? And how many are too many or too few? These are difficult questions for most health plan sponsors to answer. One thing is clear: there is significant variation between the usage levels from one group to another. (more…)
How well is your PPO network performing?
If we’re talking breadth of access and depth of discounts ― it probably looks pretty good! As far as helping you secure lower costs than their competitors ― it’s probably not making a big difference. (more…)
Specialty drug per employee cost trend refers to the change in specialty drug spend per employee from 2017 to 2018 for each company in our database. While the average increase of 11% is right in line with benchmarks, the year-to-year price movement for each company is all over the board. Only 15% of the groups in our database had a trend rate between 10% and 15%. (more…)
Employee cost share is defined as the percent of total medical and Rx plan costs paid by employees. This number includes employee contributions, as well as copays, deductibles, and coinsurance. Often, when companies report cost share, they only focus on employee contributions. But with the prevalence of high deductible plans, it’s more important than ever to ensure companies measure and manage the entire employee outlay and its relation to total cost. (more…)
Prescription drug discounts are calculated by looking at the Average Wholesale Price (AWP) and the actual drug cost (sometimes called the “ingredient cost”). In looking at our employer data set, it is interesting to note very little correlation between higher discounts and lower per employee per year drug costs. This indicates the mix of drugs being dispensed, and other pricing games, are offsetting proposed and reported discounts. (more…)
Overall trend looks at medical and prescription drug costs (claims and administration expenses) combined on a per employee basis year-over-year. While the average is somewhat expected, the 27% difference from highest to lowest illustrates that trend is not as linear as we might often think. Knowing your trend rate is essential, but more importantly, knowing if you are trending to the mean of per employee per year cost benchmarks or further away is critical to managing your plan.
How does your plan compare? Let us know if you would like to gain more insight into how to measure and manage your plan trend.