Transcript Keith Bruhnsen - Michigan Purchasers Health Alliance

Michigan Purchasers Health Alliance Annual Fall Kickoff
U-M Drug Carve-out – Greater Plan Sponsor
Involvement in Drug Benefit Management
September 20, 2007
Keith Bruhnsen, MSW
Assistant Director, Benefits Office
Manager, Prescription Drug Plan
1
Presentation Topics
• University of Michigan Facts
• U-M Prescription Drug Carve-Out
• Plan Design
• PBM Selection
• Effective Controls and Innovative Practices
• Focus on Diabetes
• Focus on Medicines
• U-M Results
2
U-M Facts
As a Employer:
• 34,800 employees & 6400 retiree contracts
• 80,00 covered lives
• 7 Unions (25% of actives)
• 2006 health care cost $233M (25% Rx)
As a Provider:
• 4 pharmacy’s (1/2 of drug plan scripts)
• Coordinated effort with prescribers & hospital
committees
3
U-M Prescription Drug History
• Pre-2000 15-30% Rx trend rates
• Inadequate rx data from health vendors
• Minimal rx programming
• Inconsistent coverage
• Study the problem & propose solutions
4
2002 Prescription Drug Work Group
Recommended:
• Self-funded & self-administered carve-out operational
structure
• Create an equitable co-pay structure
• Harmonize drug plan coverage
• Utilize campus expertise
• Improve physician and patient education
• 1/1/03 Consolidated Plan Implemented
5
U-M Plan Design
• Rich plan design, low member out-of-pocket cost ($7 - $14 $24)
• Maintain open formulary of available drugs with standard
exclusions (cosmetic, experimental)
• Added coverage for psychiatric drugs; oral
contraceptives/devices; smoking cessation; $0 co-pay
insulin/needles/test strips/lancets, prenatal vitamins; $5,000
fertility lifetime benefit
• Mail-order pharmacy (90-day retail max, 90-day option for mail
order supplies at 2x co-pay)
• Annual Out-of-Pocket max “safety net”: $2,500 individual and
$5,000 family
• 75% refill limit
6
2005 RFP PBM Selection
2006 Selecting Transparent Vendor
•
•
•
•
Plan design flexibility
Claims data access
Unbundled services
Improved Pricing




•
•
•
•
Per transaction basis
100% pass-through
100% rebates
Good MAC
Medicare Part-D Employer Subsidy
Research opportunities
Innovative partner
Ease of doing business (coding )
7
Operations
Benefits Office
• Administrative, financial and clinical oversight
Pharmacy Benefit Oversight Committee
•
•
•
•
Broad representation, advisory
Endorse review of new drugs
Review financials, customer issues, new programs
Address member communication and privacy
Pharmacy Benefit Advisory Committee (P&T)
• Small monthly work group of MD’s and pharmacist
• Review new drugs, formulary, PDL, programs
• Monitor utilization, design PA criteria
8
Key Strategies
• Manage toward lowest net cost based on evidence based
medicine
• Adjust plan design to goals, sensitivity to member disruption,
and more consumer involvement
• Manage rebate game - rebates diminish with generic releases
and increased specialty Rx spending
• Future savings are in managing “appropriate use” - utilization,
overuse, waste, abuse, and off-label prescribing
• Demand accountability: audit claims, system set up, and rebates
• Continually educate plan members on plan rationale and
individual opportunities
9
Plan Design Initiatives
• Benefit Limitations on Supplies and Quantities
– Limits on Fertility, ED, Smoking Cessation and Weight
Loss
• Plan Exclusions
– Standard (cosmetic, anorexiants, etc)
– Non-coverage of Rx drugs with OTC alt/equivalents
• FDA Approved Dosing Limits (maximum daily doses)
• Manage Out-of-Network & Compound Claims
10
Pharmacy Program Intervention Matrix









Patient Based
Compliance Programs
Disease Management
DAW Penalties
Patient Education
o Web
o Print
o Consultation
o Personal letters
Physician Based
Retrospective Drug
Utilization Review
Physician Profiling
Physician Education
E-Prescribing
Electronic Support
(ePocrates)



















Drug Based
Formulary and PDL
Rebate Administration
Dose Optimization
Tablet Splitting
Benefit Based Co-Pays
Step Therapy
Quantity Limits (MDD)
Prior Authorization
Generic Incentives
Therapeutic Interchange
Mail Order
Performance Rx
Pharmacy Based
Network Administration
Concurrent Drug Utilization
Review
Electronic Messaging
Network Reimbursement
MAC Pricing
340B Specialty Drug Pricing
Audits
11
U-M Rx Plan Cost History
Year
Annual
Plan Cost
PMPY
Plan Share Member Share
2000
$33M
82%
18%
2001
$36M *
78%
22%
2002
$42M
79%
21%
2003
$43.4M **
81.5%
18.5% ($9.8M)
2004
$49.4M
12.6%
82.1%
17.9% ($10.7M)
2005
$55.7M
11.3%
83%
17% ($11.4M)
2006
$58.3M
3.4%
83.3%
16.7% ($11.7M)
* = Copay changed from $5/$10 to $7/$14
** = Added 3rd Non-Preferred Tier at $24
12
U-M Health Plan Rates
and Prescription Drug Plan Premiums
Annual Percentage Change
in Health Plan Rates:
2004
2005
2006
2007
Health (Medical & Rx):
14.90%
5.00%
5.40%
8.9%
Prescription
18.80%
-3.30%
-6.40%
0.00%
Medical
13.70%
7.70%
9.00%
11.02%
Health Plan Coverage Levels
2004
2005
2006
2007
One Person
$71.58
$66.58
$63.92
$63.92
Two Person
$136.72
$133.16
$127.84
$127.84
Three or More Person
$159.64
$187.76
$180.26
$180.26
13
Monthly Prescription Drug Rates:
UM RX Trend in Comparison to National Averages
70
If UM had follow ed National Trend Increase in Rx Cost
65
60
(Millions)
A ctual UM RX Co st
55
50
UM Spent $ 207.3M fo r Drug Co st 2003-2006
If Natio nal Trend, wo uld have spent $ 235.8M
Net different o f $ 28.5M
45
40
2003
2004
2005
2006
14
Avg. Ingredient Cost Paid / Days Supply * 30
$69.00
$68.00
Moved to SXC
$67.00
$66.00
$65.00
$64.00
$63.00
$62.00
$61.00
$60.00
$59.00
J- F- M- A- M- J- J- A- S- O- N- D- J- F- M- A- M- J- J- A- S- O- N- D- J- F- M- A- M- J- J15
05 05 05 05 05 05 05 05 05 05 05 05 06 06 06 06 06 06 06 06 06 06 06 06 07 07 07 07 07 07 07
16
U-M 2006 Financials, 2007 Metrics
•
•
•
•
•
•
•
•
FINANCIALS
Transparent vendor = $4.5M
4.35% increased GDR =
$2M cost avoidance
Pill Splitting = $195k Plan,
$25k Members
340B Pricing = $512k
DAW1 = $130K (93
members)
Smart PA’s = 17% reduction
in PA request
Medicare Part-D Subsidy =
$3.5M
Focus on Diabetes cost
$200K (6 mths)
2Q 2007 Metrics
• Tier 1 generics = 62%
• Tier 2 preferred brands = 25%
• Tier 3 non-pref brands = 13%
• Mail Order Utilization = 8.4%
• 90 Days @ retail = 8.9%
• Generic sub. rate = 97%
• Percent generic adjudicated at
MAC = 87%
• 2006 UM Plan $ inc. = 5.77%
(2007 projected = 5.1%)
• 2006 PMPY $ Inc. = 3.64%
17
Research and Other Initiatives
• Tablet Splitting – half price financial incentives to
patient
• College of Pharmacy: Retail Pharmacy Safety &
Customer Satisfaction Survey , Whitepapers
• Injectable Pilot Program using hospital public health
service pricing (340B)
• Statin & PPI Switch Program with UMHHC
• MHealthy: Focus on Diabetes
• MHealthy: Focus on Medicines
18
MHealthy: Focus on Diabetes
• Substantial medication underutilization and
adherence (40-60%)
• 2,227 UM employees with diabetes mellitus
• 2,631 members benefiting
• Diet controlled may opt-in
• Copays: generics $0, brands -50%, non-pref. -25%
• Provide copay reduction for:
–
–
–
–
–
–
Glycemic agents
Antihyperlipemics (statins, fibrates, etc)
All antihypertensives (ACE, ARB, diuretics, etc)
Calcium Channel Blockers
Beta-Blockers
Antidepressants
19
Focus on Diabetes – cont.
• Outcome Measures
– Adherence – based on pharmacy claims
– Medication and total health care spending
• Plan Cost: $400,000/yr
• Member Copay Relief: Avg $152.89/yr
• Decrease in pill splitting side effect
20
MHealthy: Focus on Medicines
• 3000 employee & retirees with 9+ medications in past
120 days (review OTC, supplemental)
• Goals to improve health, identify safety concerns,
contain cost, and optimize members therapy
• EOB with history, plan/member cost and savings
opportunities: preferred brand, generic, or pill splitting
Three study groups:
1) EOB suggestion to consult with physicians
2) EOB + offer of pharmacist phone consultation
3) EOB + letter offer for face-to-face consultation with
pharmacist and review of medical record
• Identify areas for future expansion
21
Summary
• Competing interest in PBM’s profitability & employer cost
• Carve-out can control drug spending
• Employer must invest resources for returns
• Innovative designs can manage use and shape behavior
• There are vendors eager to work in a culture of innovation
UM Benefits Office: www.umich.edu/~benefits/
Questions: [email protected]
22