We have a problem. In a world of increasing healthcare costs, prescription drug spending for self-funded employers now comprises 30% of total medical claims (Rx Drug Plans Shift Costs to Employees). From 2014 to 2018, per person spending on prescription drugs increased 19% (Health Care Cost Institute). Though employers are using numerous strategies to address rising costs, onsite/nearsite clinics remain a largely untapped resource in the battle against rising drug costs.
Nationally, the trend toward adoption of a worksite health center strategy continues to increase. For large employers, onsite/nearsite health center adoption increased by 12% from 2014 to 2019 (5 Healthcare Benefits to Track in 2020). The National Association of Worksite Health Centers says that a third of employers with over 5,000 employees now offer a worksite clinic and the rate of adoption in smaller employers is also growing.
Traditional Approaches Are Limited
Though many employer-sponsored onsite/nearsite health centers offer access to prescription drugs, available drugs are limited and there are still many sites that offer no medications at the point of care. Onsite dispensing is regulated by state with a few states restricting it completely and others limiting it based on the type of medical provider (medical doctor, physician assistant, or nurse practitioner). For sites offering onsite dispensing, the service brings patient convenience and compliance but has limited impact on cost savings because it typically represents less than 5% of overall prescription drug spend.
Traditional approaches to prescription drug management from a worksite clinic perspective have been very narrow and limit the overall value and impact potential for the clinic investment. The employer-sponsored onsite or nearsite health center has a unique opportunity to impact patient care and costs, including prescription medications. However, getting the full Rx value benefit from the health center requires a shift in thinking and a coordinated strategy.
Getting Started
The first step in leveraging an onsite/nearsite clinic for pharmacy savings is to understand your spend. Analytics alone are not enough. Actually, we’re drowning in data and it is often used to obfuscate more than enlighten. We have to get the right data, analyze it within the right context, and distill from it the actionable insights necessary to make better decisions strategically and tactically. Many employers and even their clinic management partners punt these critical decisions downfield in the hope that someone else will catch them and make something happen.
Consider this, medications dispensed onsite typically cost 40%-50% less than if those prescriptions were sent out to a retail pharmacy – a savings that includes the elimination of the co-pay for the patient. Why are we limiting that approach to only 5% of our overall drug spend? What other drug costs might we impact though our investment in an onsite or nearsite health center?
Part of the limitation has to do with minimizing onsite inventories because of risk of waste in expired/unused medications. Another part of the limitation is having a plan for prescription impact from a worksite clinic perspective. However, the biggest part of the limitation is accessing expensive brand drugs that are part of the frustratingly opaque and complex rebate game played by manufacturers and PBM’s. A game fraught with back-room deals, misaligned incentives, and obfuscation.
An Untapped Resource
The onsite/nearsite clinic is an untapped resource in the battle to lower drug costs and leverage medications to improve outcomes. With the proper pharma partner, self-funded employers can impact overall drugs costs, improve patient outcomes, and derive more value from their investment in a worksite clinic.
With good analysis, we can identify the appropriate medications to offer onsite. Great, you say, that is good for 5%-10% of our spend but what about everything else? The answer is an integrated model that leverages home delivery pharmacy in addition to medications offered in the clinic. Imagine the possibilities when you can impact 50%-60% of your drug spend through better pricing, clinical savings, and rebate access – all coordinated through the health center in which you’ve invested!
A properly designed and executed clinic pharmacy program can yield 15%-20% savings on overall drug spend. Suddenly, clinic impact becomes clearly measurable, more significant, and highly targeted to the greatest needs of your employee population. Broader medication coordination through the onsite health center helps make it a nexus of care and your medical providers the quarterbacks of your employees’ health. Your primary care initiatives take on an entirely new meaning as the clinic integrates pharmacy in new and powerful ways.
Targeted Solutions = High Impact
From there, it isn’t a great leap to target problem population health areas in new, interesting, and high impact ways. Diabetes? Hypertension? Smoking cessation? Clinically-led, pharmacy-coordinated programs can be tremendously effective at driving engagement and improving outcomes in a way that is very difficult when they are not synchronized. Cost effective access to medications becomes an incentive to utilize care services and helps the health center truly center on the health of the patients who might benefit most.
For the self-funded employer, a sponsored health center solution is a powerful tool in the war on costs. However, to optimize your investment and maximize the value of the onsite/nearsite clinic, you must have partners who bring new ideas, innovative strategies, and proven capabilities to help you plan and execute any program.
Ultimately, your clinic investment should help you lower overall Rx costs while improving outcomes with targeted programs. Period. If you are not having this conversation today, make it a priority. If your partners cannot, or will not help, then re-evaluate your relationship. For most, the worksite/nearsite health center is an untapped opportunity in the battle against increasing Rx costs. It’s time to tap it.
