The Employer's Guide Blog for Overseeing PBMs

The Definition of Oversee: to watch over and direct (an undertaking, a group of workers, etc.) in order to ensure a satisfactory outcome or performance.

Most employers (60%) aren’t tracking wasteful healthcare spending

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Breakdown of the sources of health care wasteful pending
Most employers are not collecting or analyzing data to track unnecessary healthcare spending, even though they see waste as a problem, according to the survey from National Alliance of Healthcare Purchaser Coalitions.

Healthcare is estimated to waste more than $750 billion annually, and respondents said they view this is a problem. More than half of them  (57 percent) said they believe up to 25 percent of treatments employees and dependents receive are unnecessary.

The survey involved 126 U.S. employers in several industries, including manufacturing, education, financial services and healthcare. For the purposes of the survey, waste was defined as “procedures and treatments that are overused, have limited effectiveness, and/or are repetitive to tests and procedures that have already been conducted.”
Four findings:
1. A majority of survey respondents (59%) don’t collect and analyze data in order to track waste.
2. One-third of employers in the survery (34%) farm out that task to at least one vendor (such as a pharmacy benefits manager, a health plan, or a consultant).
3. Only 7% of those surveyed said their organization tracks waste internally.
4. Respondents cited medical imaging, specialty drugs, prescription medications and  clinical tests as the largest contributors to waste.
Tyrone’s Commentary:

A critical component to eliminating wasteful Rx spending is a leadership-instilled culture of learning. A learning employer is stewarded by leadership committed to a culture of teamwork, collaboration and adaptability in support of continuous learning as a core aim

In a learning culture the employer takes ownership and doesn’t kick the can down the road. Complex PBM operations and processes are constantly refined through ongoing team training and skill building, systems analysis and information development, and creation of the feedback loops for continuous learning and system improvement. 

Tyrone Squires, MBA, CPBS

I am the proud founder and managing director of TransparentRx, a fiduciary-model PBM based in Las Vegas, Nevada. We help health plan sponsors reduce pharmacy spend, by as much as 50%, without cutting benefits or shifting costs to employees.

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