After more than 25 years in the insurance business, these past two years have brought unprecedented challenges and curve balls I certainly didn’t see coming. Prior to early 2020, it had honestly not occurred to me that a global pandemic would have the devastating one-in-a-lifetime (let us hope) outcomes that COVID-19 wrought. We have navigated a multitude of pandemic policies and continue to face supply chain issues, staffing shortages, inflation, and rising healthcare costs.
Reputable employers take great pride in rewarding their employees’ loyalty with high-quality, affordable healthcare. But each year, this gets harder and harder, as healthcare costs increase at a much faster rate than normal inflation, historically speaking. Between 2016-2019 healthcare costs increased by 14.3%. As more of our resources are poured into higher premiums, employers are left with less to invest into their business operations, competitive benefits, and employee wages, shifting the cost burden from employers to employees via higher out-of-pocket costs and lower wages. When 58% of Americans don’t have $1,000 in their bank account, and the price of pretty much everything on the rise, this is a critical time to ensure that American workers are not saddled with even more costs at the pharmacy.
As inflation and a tough business environment continue, we don’t need lawmakers to simply jump on board what seems to be a quick and easy solution to a complicated problem. We really need lawmakers to think about their constituents when they contemplate legislation and consider the harm it might cause to the businesses and families they are elected to represent and serve.
Pharmacy Benefit Managers (PBMs) are being cast as a culprit of rising healthcare costs, and sometimes that is well deserved criticism and scrutiny because not all PBM’s are created equal, and there is certainly a vast array of questionable tactics and pocket lining. But there are also PBMs that actually serve as the business community’s advocates in the drug marketplace. When they are transparent and focused on the patient rather than their own shareholders, PBM’s can ease the burdens on our employers by redirecting savings to the pharmacy plans themselves, and the employees utilizing them.
When PBMs are operating as they should —and the good ones do— they drive prescription prices down because they have the scale to negotiate with drug manufacturers. Given that pharmacy costs make up more than 25% of overall healthcare costs and are expected to increase to 50% in the coming years, employers continue to need the guidance, expertise, and scalability transparent PBMs can provide.
Honest and transparent PBMs can serve as a vital resource for employers to protect against rising costs. So, while healthcare reform remains important in terms of shining a light on money and power grabs, it’s essential to retain and promote tools that drive down healthcare costs and help promote patient safety and affordability.
Importantly, PBMs can achieve better health outcomes. Studies have shown that over the next ten years, PBMs will help prevent 1 billion medication errors. In one such case study we’re aware of, the patient received 4x the recommended dose of a prescribed medication due to a pharmacy system error. The PBM’s clinical oversite team caught this anomaly, contacted the physician, corrected the pharmacy error, and notified the patient – saving the plan just over $200,000 AND ensuring the patient did not inadvertently overdose on his medication.
Like so many other business leaders, I have witnessed countless debates, watching time and time again as well-intended policies fall short and costs continue to rise. And now, Congress’ latest debate is threatening one of the most effective tools employers have to combat healthcare costs. It’s important to speak up and urge lawmakers to consider their constituents as human beings when contemplating their stance and votes.