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IDN saves $1M+ through new PBM relationship


In any business today, managing pharmacy benefits effectively is a growing concern. Drug costs continue to climb. Expensive specialty drug use and rapidly escalating costs are especially alarming. “Pharmacy benefits can quickly throw you off balance cost-wise,” said Teena Senicka, Manager, Total Rewards, Riverside Health System in Newport News, VA. “It’s a red flag area of concern.” In the third quarter of 2013, Riverside began a review of its Pharmacy Benefits Management (PBM) relationship. “We wanted a more innovative approach,” Senicka said. “We needed to look for new ways to drive savings. We wanted a partner to help us develop a custom solution, to take better advantage of our own health system’s resources.”

An engaged member of Premier, Inc. (NASDAQ: PINC) and winner of the 2015 Norling Award, the health care alliance’s highest member recognition, Riverside turned to Premier. The two partnered in the first quarter of 2014 to launch a program that used Riverside’s resources in combination with Premier’s PBM program administered by MedImpact. For employees who use the system’s retail pharmacy, there is no copay or it’s reduced. Riverside even developed an app employees can use to order refills via their smart phones. All they need to do is pick up the prescriptions from the in-house pharmacy. The PBM benefit is woven into employee benefits.

For instance, the My Healthy Lifestyle Wellness Program in 2016 will offer new incentives for employees who use the diabetes education program or professional coaching for such chronic conditions as asthma, coronary artery disease and heart failure. The year-old diabetes program has been a success, Senicka said. Among other things, to promote compliance among employees and dependents, diabetes drugs and supplies in generic and brand categories do not have copays and non-formulary drug prices are significantly reduced. Riverside’s emphasis is on making resources available to help employees or dependents manage diabetes by removing cost barriers.

In 2014, year one of the PBM relationship with Premier, Riverside saved more than $1 million – 14 percent of plan drug costs. “Results have exceeded our expectations,” said Senicka. “Premier is a flexible partner. When we see opportunities, Premier either has a program we can use or will work with us to develop a custom solution. Premier’s innovation and flexibility has produced very tangible results.” Premier’s PBM integrated with our in-house pharmacy – which we’re continuing to drive our employees to for cost reasons obviously – and this produced a million dollars’ worth of savings that we didn’t even think was possible.”

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