Federal contractors have noted significant rises in healthcare costs in recent years, and the skyrocketing prices of medications are a driving force behind this dire situation. With the prices of prescription drugs rising by an average of 4% per year and specialty drugs increasing by 21% per year, many federal contractors are looking for ways to keep costs low and prepare for future increases.
While many federal contractors have been reducing the coverage they offer to contain their costs, other ways exist to minimize expenses while ensuring valued employees continue receiving excellent healthcare.
Here is a look at how drug costs are changing and some effective strategies forward-thinking federal contractors can employ to prepare for future drug cost-saving opportunities.
Choose PBMs Carefully
Federal contractors can find cost savings by working with partners such as pharmacy benefit managers (PBMs) whose priorities align with their own. These intermediaries can negotiate drug prices and rebates with pharmaceutical companies.
Although partnering with a new PBM may lead to reduced costs at first, it is necessary to manage the relationship consistently to ensure benefits are maximized and the bottom line is protected.
Federal contractors should review their contracts regularly to ensure they get the best value and service and are prepared for future drug price changes.
Consider how transparent the PBM has been about its pricing arrangements, how much savings it passes on to the organization, and how it manages drug adherence and utilization.
Pay Attention to Plan Management
Federal contractors who use a self-funded model for their health benefits have the power to negotiate contracts. They have some control over what drug formularies should include and which restrictions are prudent. They can also find ways to maximize the rebates they receive from drug makers.
Federal contractors who use a fully insured model, in contrast, depend on their carriers to manage drug formularies and adjust their authorization requirements to ensure that only the individuals who have a genuine need for specific drugs can obtain them.
Another way to cut costs is by guiding patients to generic versions of the drugs they take or lower-cost biosimilar options.
Experts point out that in certain cases, rebates may be available on brand-name drugs that can bring their cost closer to that of generic options – and in some cases, the cost can be even lower. It is important to consider the drug’s net cost and suitability for the patient.
Embrace Modern Technology
Another effective way federal contractors can control prescription drug costs is by ensuring their employees are properly educated. Employees who do not understand how a plan works may be unable to get the most benefit from it. This is particularly important following changes to the prescription drug plan.
Any time a major change is made, federal contractors should ensure their employees understand the changes well enough to alter their behavior accordingly.
For example, apps are available to provide employees with alerts when the price of a drug rises so they can talk to their doctor to find out about more affordable alternatives.
Federal contractors can use communication methods such as webinars, newsletters, and mobile apps to ensure all of their employees know how their plan works and what it covers.
However, it is just as essential for federal contractors to ensure that everyone on their plan follows their drug regimens, as poor compliance can raise plan costs, put people’s health in danger, and impact productivity.
Optimize Benefits Offerings
With drug prices poised to continue rising, federal contractors can design their benefits offerings to encourage the cost-effective use of medications. For example, tiered copayments or coinsurance that vary depending on the drug’s value or category can make a difference.
Another good approach is offering wellness programs or incentives to encourage employees to adopt healthy behaviors and stay on top of managing chronic diseases.
Digital health solutions and telehealth can also decrease drug costs by allowing employees to access care and support at the first symptoms of an illness or disease.
Develop a Comprehensive Strategy for Drug Cost Savings with Business Benefits Group (BBG)
Federal contractors seeking a proactive approach to protecting their bottom line against rising drug costs can benefit from a tailored strategy designed with their needs and budget in mind.
To learn more about cost-effective and forward-thinking federal contractor benefits plans, schedule a consultation with the experienced benefits brokers at Business Benefits Group (BBG) today.