Shifting the emphasis of medication management beyond transaction costs

The rapidly increasing costs of medications are making headlines. In fact, in the 2015 Workers’ Compensation Drug Trends Report, Helios reported an 11.4% increase in Average Wholesale Price (AWP)—the highest we’ve ever reported. While payers, pharmacies, and Pharmacy Benefit Managers (PBMs) do not calculate or determine the rise or fall in AWP, by working together, we can mitigate the factors that influence spend, while also improving outcomes for injured workers.

Shifting the medication management emphasis away from transaction costs alone to the clinical management of both cost and utilization factors accomplishes this task. This holistic approach starts with the first fill and continues until the injured worker either no longer requires pharmacy therapy or settles the claim. And at every step, collaboration with a PBM is essential. For example, strategies deployed by Helios, such as the following are proven to make a positive difference in the outcome of a claim.

Strong network capture and enforcement
The more prescriptions captured in-network, the greater control a payer has over both cost and utilization. Capturing prescriptions in-network facilitates application of network discounts, drug utilization review, formularies, and other business rules that are designed to achieve better clinical outcomes for the injured worker, while simultaneously reducing overall pharmacy costs. Helios continues to be the gold standard for network capture, achieving up to 98% retail network penetration. Additionally, our network penetration strategy addresses all potential sources of a pharmacy transaction in addition to retail, including mail order, physician dispensers, occupational health clinics, and third-party billers. By bringing transactions from all of these entities in-network, we improve insights into transactions, which helps drive statistical models that identify clinical interventions and allows for point-of-sale adjudication edits to reduce utilization.

Proactive mail order programs
While not immune to increases in AWP, the use of mail order can effectively reduce overall pharmacy costs by extending days’ supply versus the retail equivalent without sacrificing utilization management. Our data shows that for every 10% shift away from retail days’ supply to mail order days’ supply, payers experienced a 1.4% reduction in total spend. This is financially beneficial for payers and is convenient for the injured worker and/or their caregiver.

Generic dispensing and conversion programs
Despite significant AWP inflation for many medications, the use of generic medications continues to be a cost-effective alternative to brand equivalents. Additionally, our research found that every 1% increase in generic utilization results in a 2.2% reduction in spend. Point-of-sale efforts to mandate generic fulfillment consistent with state of jurisdiction requirements, as well as concurrent and retrospective clinical interventions, benefit payers while also assuring the safest, most cost-effective therapy for the injured worker. 

Predictive analytics and early intervention
As a claim ages, and the time from the initial injury increases, the average cost per claim increases. Therefore, it’s important to optimize the injured worker’s medication therapy regimen as early as possible. Predictive analytics, coupled with comprehensive, evidence-based clinical programs, allow our clinicians to apply the right clinical resources to the right claims earlier in the claim life cycle. As a result, pharmacy claims close sooner. In fact, in 2014, our clients experienced a 60.5% decrease in the likelihood of a claim maturing beyond two years.

Collaboration delivers positive results
By just looking at transaction costs alone, you may believe that you are maximizing efforts to control costs. However, if the per transaction cost is low but prescriptions are being filled that shouldn’t be, you may not be controlling costs as effectively as you could. Moreover, reliance on cost alone could overlook utilization concerns and thereby miss opportunities to mitigate, if not avoid, misuse and abuse situations.

Ensuring injured workers receive the right medication at the right time, in the right dosage, for the right duration, requires diligence throughout the care continuum. The greater the synchronization, the better the decisions made in the claim. By partnering with a comprehensive, customer-centric PBM, such as Helios, that understands the workers’ compensation industry, payers can leverage our expertise to control pharmacy cost and utilization.