The Alliance Goes to Washington
Last week, we attended the National Alliance of Healthcare Purchaser Coalitions annual conference in Washington, DC. The National Alliance brings together 45 coalitions from around the country to address topics of concern for everyone. Most of these coalitions are purchaser-based ranging from non-profits, like WHA, to cooperatives and for-profit organizations. This year was no different with a focus on three primary areas – mental health, rising pharmacy expenses, and strategies to purchase benefits in new ways.
The issues surrounding mental health are universal including the increasing prevalence of need, lack of access to network providers, and how employers can make an impact through a culture of inclusion and social connections. There was a continued focus on alternatives to traditional in-person visits to fostering tele-behavioral health, digital health assets, and the use of newer alternatives such as prescription digital therapeutics to offer more options for employees and families.
Pharmacy is rapidly surpassing hospital costs as the number one cost category for most commercial employers. New therapies, including cell and gene, are both equally amazing in the benefit provided and the sticker shock of incurred claims. Cancer treatment and autoimmune disorders commonly now exceed $100,000 per year without a clear treatment endpoint. Two areas of purchase opportunity are the adoption of biosimilars where available and transparency in pharmacy benefit manager (PBM) pricing.
Our own Denise Giambalvo led a panel discussion on the challenges of biosimilars from adoption by prescribers, acceptance by patients, and inclusion by health plans and PBMs. Biosimilars are commonly 30+ percent less expensive than the originator medication even when adjusting for rebates and other discounts. Understanding your own PBM’s approach to biosimilars is a key first step including full transparency on rebate calculations, formulary adoptions or exclusion, and the potential financial savings for your organization.
The PBM discussion revolved around pricing transparency, formulary management, and alternatives to a traditional vertically-integrated PBM. It is imperative that every purchaser have and expect full transparency on pricing from administrative fees, spread price, rebates, subsidization of health plan ASO fees, and payments of 1+ percent to the broker/consultant recommending that PBM. Self-insured employers should expect 100 percent of rebates and other discounts returned to them including those from the medical pharmacy. PBMs can more than double the costs of medications and hospitals/providers have charged as much as 5 times. Alternative PBMs have been shown to deliver a 50 percent reduction in costs and, at a minimum, should be independently evaluated.
There are a variety of purchasing strategies being deployed nationally. Some of the coalitions directly contract with hospitals and providers for their employers. There are aggregators of the multiple-point solutions (900+), so you are no longer limited to the available health plan. Alternative benefit structures, including defined contribution, cash payments, etc., have become more sophisticated in driving to a lower price point and may be viable for some employers.
Different at this year’s conference was increased attention paid to the need to move from equality in benefit design to equity in benefit design. The focus has become if everyone is treated equally, then access to the most appropriate care is lost by those that fall outside of the approximately 80 percent of respondents to care.
At the end of the conference, several coalition leaders were able to go the “The Hill” and meet with congressional and senate staffers to discuss four areas of focus in the near term. Those included PBM transparency, mental health support, including integration into primary care, hospital consolidation impacts and increasing flexibility for HSA plans to provide first-dollar coverage for services including mental health and telemedicine. The reception from both Democratic and Republican staffers was very positive, including those from Speaker Pelosi and Senator McConnell’s teams. We are hopeful that some or all of these issues will be addressed in the upcoming legislative sessions.
We at the WHA are available to you and we hope you will address:
- Does my plan design fully support mental health access?
- Assess how prescription digital therapeutics are being covered by my plan?
- Are biosimilars first-line therapy? If not, what questions do I need to be asking?
- Do I have full price transparency on how my PBM is pricing and do I have alternatives in the market?
- How does my plan support high-quality, lower-cost care? Should we expand our medical tourism benefit and COE approach? What about defined contributions, is that a viable alternative for us and better for our members? How do I approach point solutions that will target the right members and get active engagement?
Please feel free to reach out and we will be happy to have further discussions with you including connecting you to additional resources as appropriate.
Published: November 14, 2022