A Prescription for Savings:
Integrating Medical and Pharmacy Benefits

Prescription drug spending is the fastest growing part of health care spending. It represents approximately 20% of all health care spending and continues to rise year after year. There are many factors behind the rising costs, including:

  • Increasing use of prescription drugs
  • Newer, higher-priced drugs replacing older, less-expensive drugs
  • Manufacturer price increases for existing drugs
  • Fewer manufacturers, which means less competition
  • Unnecessary prescriptions

To manage costs, some employers outsource, or “carve-out,” their pharmacy coverage to a standalone pharmacy benefits manager (PBM). Others integrate, or “carve-in,” their pharmacy benefits and medical coverage with their health plan.

Integrating benefits saves money, helps members live healthier

Highmark conducted a three-year study to find out which option yielded the most savings. The study compared approximately 1 million carve-in members and 1 million carve-out members of relative age and risk.

Researchers summarized the medical cost of each episode of care, emergency room visit, and hospitalization for the three-year period and then calculated the cost differences between the carve-in members and the carve-out members.

The study showed members with integrated medical and pharmacy benefits had an average savings of $172 per member per year (PMPY). This figure included $54.72 PMPY lower costs to treat chronic conditions.

Members with integrated benefits also had 5% fewer hospital admissions and 16% lower hospitalization costs. And, those members showed a 1–2% higher adherence rate to medications for chronic conditions.

Integrating benefits for a complete health picture

A key reason integrating benefits leads to cost savings and better health outcomes is that doing so allows for access to real-time data around both medical and pharmacy care and coverage for members.

With a more complete picture of members’ health, health plans can more effectively manage members’ total care and make smarter decisions. It offers opportunities to:

  • Identify and resolve care gaps
  • Manage members’ chronic conditions and costly complications better
  • Reduce unnecessary treatments, duplications, and inappropriate prescription use

All of those can lead to higher costs, complications, and errors.

Highmark’s integrated approach leverages the advantages of real-time data and the strength of a multidisciplinary team, including trained pharmacists, to meet member needs, help improve overall health care outcomes, and efficiently manage both pharmacy and medical costs.*

*Health care plans and the benefits thereunder are subject to the terms of the applicable benefit agreement.

 

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