Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 19, 1995 TAG: 9502210007
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY
DATELINE: LENGTH: Long
But how do prescription drugs fit into the picture?
Nationally, prescription drugs account for about 10 percent of companies' health insurance costs, but at some businesses the percentage is way up at 17.
That's according to Jan Sessor, a Virginia Tech marketing graduate, who said he found a few Roanoke area companies that were at the high end of that measure. Six or 7 percent is what companies should be striving for, he said.
Two years ago, right out of school, he set up an office in Roanoke as sales representative for United Pharmacy Network, a North Canton, Ohio, consulting company his brother helped found in 1992. United manages prescription drug costs for companies that insure themselves for employee health benefits. It came here, Sessor said, because the area looked so rife with United's target business; that is, companies with fewer than 3,000 employees, especially those with 500 to 1,500 employees.
And it was a good decision, Sessor said. He got all the local pharmacies to join his network - which means they agree to sell drugs to his clients at predetermined prices. He has a tie-in local mail-order drug company, Star City Scripts. His company provides the prescription drug services to members of the Blue Ridge Regional Health Care Coalition, a consortium of businesses concerned about controlling health insurance costs.
Plus, he has signed up industry clients by convincing them that he can lower the amount of money their health plans spend for prescription drugs for employees and employees' families.
Sessor pushes the following program for lowering prescription drug costs.
First, a company has to collect the right data. It needs to know the kinds of drugs people are taking, the ages and genders of persons taking them, whether the drugs are name brand or generic, how much they cost, why they were prescribed, and whether they are short-term or continuing medication.
With that information, a company can begin to develop a plan for lowering costs, or have someone like Sessor do it. Costs can be managed in several ways, he said.
Have everyone in the plan use a pharmacy network.
Use mail-order pharmacies for maintenance of long-term medications to get the best price.
Encourage the purchase or lower-cost generic drugs rather than name-brand medicines. Companies either could insist on use of generics or encourage it by charging higher co-payments for brand-name drugs or having employees pay a portion of the higher cost.
Exclude double billing by coordinating benefits. If an employee's family has two sources of insurance - because of two people working or because of divorced parents covering children who live with the other parent - make it impossible for the request for reimbursement to be submitted to both sources.
Your company might be only the second source for reimbursement of the amount not paid by the primary coverage company rather than having to pay it all.
Managing drug costs is a lot more than just issuing a drug card to employees, Sessor likes to point out. A drug card is just another credit card unless there's a prescription drug plan, he said.
Another way to control costs is to implement a formulary, a list of brand-name and generic drugs that provide the best therapy for a condition at the lowest cost. Employees can give this preapproved list to their physicians and encourage them to prescribe those drugs. A company can get data to help build that list by looking at what is currently being taken by employees and families.
At some point, companies also might need to find nice ways to interfere in an insured person's life to insist that he take his medication properly or to encourage her to make a lifestyle change that could eliminate the need for the medication, suggested an article in the December issue of Employee Benefit Plan Review, a publication aimed at plan managers.
The magazine also included a list of questions a company can use in selecting a mangement firm, like Sessor's. The questions came from Prescription Solutions of Cypress, Calif.
Here's a sampling:
Does the pharmaceutical benefit manager have a network of retail pharmacies that is accessible and acceptable to your enrollee population?
What kind of system does the manager have for identifying and correcting prescription abuse?
Does the manager have a mail service facility, and, can the mail service identify when a refill is due and notify the patient if one has not been ordered?
Does the manager have special programs for the management of specific disease? How does it identify and correct prescription abuse?
What is the company's average rate of savings on prescription drugs? How often will you get reports, and is the company willing to share the risk by having some of its compensation based on the savings it can achieve?
Sandra Brown Kelly covers health care and medicine and writes a weekly consumer column. Readers with online computer services can reach her at sandrakinfi.net.
by CNB