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1st Quarter 2003Executive SummariesPrescription Drugs
Long-Term Disability Plans
By working with pharmacy benefit managers (PBMs), employers can improve prescription drug use and thereby both reduce health care costs and enhance patient quality of care. This article educates employers about the importance of plan design in pharmacy benefits management, what distinguishes PBMs from other benefit intermediaries and how employers can evaluate and audit services provided by a PBM. Finally, it discusses upcoming changes in the drug benefit marketplace that will affect employers' opportunities and challenges in providing maximum prescription drug benefits at the best value.
Pharmacy benefit managers (PBMs) use a variety of pricing strategies. When employers have a thorough knowledge of those strategies, they can use them to their advantage to help manage pharmacy benefits. This article discusses PBM strategies in terms of what employers need to know, the questions employers need to ask and goals employers must keep in mind in order to secure the affordable cost and quality prescription drug management programs that they and their employees need and deserve. This article helps employers face the tough decisions they need to make in order to effectively manage escalating future pharmacy costs. First, the authors explain the past, present and future of prescription drug benefit plan cost trend and its drivers. They then identify the tools available to employers to help mitigate costs. Next, the authors define a valuable prescription drug benefit from varying perspectives and encourage employers to develop a long-term prescription drug benefit philosophy that will help everyone ride the wave of increasing prescription drug benefit costs.
Prescription drug costs are increasing at a rate of 15% to 17% a year and a look into the future does not bring much better news. In fact, it is unlikely that companies can realistically expect to reverse costs or even to avoid cost increases. However, this article provides employers with a prudent approach to managing both the supply and demand sides of the prescription drug equation in order to reduce their level of increase. Supply-side management focuses on negotiations with vendors, while the demand side focuses on managing employee utilization.
In this article, we examine the multiple data sources and outcomes surrounding the management of both pharmacy and medical cost spending for chronic health care in one pharmacy benefit manager (PBM). We offer examples of how the complex relationship between interventions and spending is utilized in order to bring value to PBMs' clients above and beyond the scope of traditional pharmacy trend analytics. Additionally, we demonstrate how the implementation of disease management programs can effectively impact the largest component of total health care costs.
Prescription drug costs are the fastest rising component of health care and are contributing to the dramatic increase in health care costs. Emergence of generic drugs, employer recognition and increased consumer knowledge are already forcing enormous change on the industry. This article explains the factors affecting the current financial pressure of prescription drugs, solutions and tactics that employers can immediately act on and the variables that employers need to be aware of in order to take appropriate action.
The tax treatment of long-term disability plans raises difficult questions for employers and employees, as it necessitates a tradeoff between tax efficiency and maximizing wage replacement for disabled workers. By using simplified case examples, this article illustrates the advantages and disadvantages of different plan design choices. The authors conclude that, in most cases, long-term disability coverage should be mandatory but that employees should be given the choice to decide whether their coverage is taxable.
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